Flutter Entertainment: Betting on the sports betting industry

I support Flutter Entertainment plc (OTCPK:PDYPY) as a purchase. This contradicts the Hold rating on PDYPY on Seeking Alpha’s Quant rating platform. I think the -37.26% 1-year price return justifies going long on this stock. PDYPY is a good rebound investment.it It is currently trading below $63, well below the 52-week high of $101.08.

JPMorgan Chase & Co. (JPMorgan) recently said that Flutter Entertainment stock may up 30.71% from current prices. This recognition could add additional momentum to the stock’s 3-month +26.58% price performance. Seeking Alpha gives PDYPY a momentum rating of A+. If you like to trade momentum rebounding stocks, then consider investing in Flutter.

The momentum endorsement of Seeking Alpha’s quantitative rating is consistent with PDYPY’s RSI indicator. Despite the recent rally, PDYPY’s RSI is only 60.98, so I don’t think the stock is in oversold territory yet.

I recommend going long on Flutter Entertainment stock until JPMorgan’s buy recommendation pushes the stock’s RSI score to 70.

Why stocks are rebounding

Flutter Entertainment have several Sports betting platforms such as Paddy Power, FanDuel and FOXBet.Estimated value of the global sports betting industry $76.75 billion last year. The 10.2% CAGR in this particular industry is a good reason to be long PDYPY.

FanDuel and FOXBet are very popular In the United States. In 2021, the U.S. sports betting business is worth $11.5 billion. This market is growing at a CAGR of 10.3%.

According to a recent survey by Morning Consult, FanDuel is the second most popular sports betting platform in the US and the biggest competitor to DraftKings (DKNG). FOXBet is number 4. This is speculative, but the combined bet of FanDuel and FOXBet may be higher than DraftKings’ bet. In my opinion, PDYPY may be a better investment than DKNG.

Flutter Entertainment’s strong U.S. presence could help it return to profitability more quickly. The stock took a hit as it posted a net loss of $572 million in 2021. Since FanDuel is already very popular in the US, Flutter Entertainment can reduce its marketing budget in the US. The Morning Consult article mentioned that Flutter spent $291 million on marketing in the US in the first six months of 2021. over $1 billion Promoted and marketed its U.S. operations last year.

Contrary to Morning Consult’s survey, Flutter management claims FanDuel is the No. 1 sports betting platform in the US

Third largest bookmaker

Flutter from 18.4% CAGR in the $287.43 billion global gambling industry. Flutter’s online/mobile casino and horse racing betting platforms make it an ideal stock.

PDYPY is the third largest casino and bookmaker based on market capitalization. As such, it is the biggest beneficiary of the $287.43 billion gaming industry.

A fast-growing global gambling business should help Flutter meet its 2023 revenue forecast of $9.92 billion.

Strong growth in gambling and sports betting bolstered Flutter Entertainment’s financials. Yes, Flutter’s total debt is $5.25 billion. On the other hand, its leveraged free cash flow is $2.03 billion, so it may not be difficult for Flutter to pay principal and interest.

Is it overrated?

We can’t use a P/E ratio to value a net loss-making company like Flutter. We can use price/sales and compare it to casino and gaming peers. According to the table below, PDYPY is relatively undervalued compared to most of its competitors.

Flutter’s TTM Price/Sales valuation is only 3.17x. This is significantly lower than DraftKing’s 3.44x and Las Vegas Sands’ (LVS) 7.08 times.

Predetermined prices are also a good way to gauge the value of a stock. Flutter trades at just 1.72 times TTM to book value. Compare this to DraftKing’s 3.34 times and LVS’s 6.51 times. PDYPD is relatively undervalued.

downside risk

The biggest risk to Flutter Entertainment is stricter government Rules for online gambling and sports betting. Gambling-related companies are vulnerable to the whims of politicians. Only invest in PDYPY if you think politicians won’t erode our inalienable right to wager with our hard-earned money.

My three brothers and I love PokerStars PP Poker, and live PokerStars is still allowed in the Philippines. There is no guarantee it will always be like this.

real money pokerstars 100 countries. only three US states PokerStars gambling for real money is allowed. These bans from too many countries are a long-term hurdle. PokerStars is no longer the most active online poker platform.

Flutter can merge Group with stars. It can also be merged or purchased with GGPoker. The privately owned NSUS Group owns GGPoker.

Another solution to Western governments’ growing strictness with gambling is to allow Flutter to expand in developing countries.Philippines and Myanmar is a good example Gambling friendly nation.

Have 34 Authorization Philippine Offshore Gaming Operator (POGO). Most of them are owned by Chinese businessmen. Ireland-based Flutter should start using the Philippines as an offshore gambling and sports betting site.

Philippines may welcome gambling operators as its foreign debt has $109 billion, so it may require cash inflows from foreign bettors. As such, it could help repay the Philippines’ huge foreign debt.

my takeaway

Should take advantage of Flutter Entertainment’s discounted stock, so I think investors should go long when it trades below $65. Based on JPMorgan’s 30.71% upside estimate, PDYPY has a price target of $80.77. This is lower than another Wall Street analyst’s PT $97.06.

If Flutter reduced its annual marketing budget, it might return to profitability sooner. Spending more than $1 billion a year on promotions in the US is not a profitable strategy in my opinion. Instead of spending too much on marketing, Flutter should build a mobile gambling app. Market Research Future estimates that mobile gambling is 12.10% CAGR. It could be worth $154.81 billion by 2030.

Betting on PYDPY may be safer than gambling at Las Vegas casinos or Pokerstars.net.Invest in gambling habits 1.6 billion people In my opinion, this could be a great way to fund your retirement.

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