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Gambling.com Group Ltd

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Gambling.com Group Ltd AI Insights

Informational only. Not investment advice.
As of 2025-12-31

Snapshot

  • Goodwill/intangibles of 261.9M is 196% of equity (133.7M) - tangible book value is NEGATIVE (-128.2M), creating material impairment risk[Goodwill and Other Intangible Assets]
  • Gross margin TTM of 93.2% vs industry median 51.6% - asset-light affiliate model generates 1.8x industry profitability at gross level[Gross Margin TTM]
  • EPS collapsed -76.2% YoY despite 25.7% 3Y revenue CAGR - interest expense (7.8M) consuming 183% of net income (1.9M)[EPS Growth 1 Year]

Watch Triggers

  • Interest Expense TTM: Falls below 5M or rises above 10MDebt service consuming 410% of net income; any change directly impacts bottom line
  • Goodwill and Other Intangible Assets: Any impairment charge announcedAt 196% of equity, even 20% write-down eliminates 39% of book value
  • Free Cash Flow TTM: Falls below 20MFCF is only source for debt paydown; decline extends leverage timeline

Bull Case

Asset-light model with 93% gross margins and 22.6% operating margins (2.8x industry median) generates 29.1M FCF on 154.5M revenue - 18.8% FCF yield on market cap

Gross Margin TTMOperating Margin TTMFree Cash Flow TTM

P/E of 7.6x vs industry median 21.2x and P/S of 1.26x vs 1.48x median despite superior margins - valuation reflects temporary earnings compression

PE RatioPS RatioPCF Ratio

Bear Case

Negative tangible book (-128.2M) with 196% goodwill/equity means any acquisition write-down could wipe equity; 76% EPS decline shows earnings fragility

Tangible Book ValueGoodwill and Other Intangible AssetsEPS Growth 1 Year

Interest expense (7.8M) exceeds net income (1.9M) with 88.2M debt and only 7.4M cash - liquidity risk if FCF deteriorates

Interest Expense TTMTotal DebtCash and Equivalents

Bull vs Bear Balance

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Forward Thesis

Debt burden will compress earnings until refinanced or paid down from FCF

1-3yhigh
  • Interest expense 7.8M vs net income 1.9M TTM
  • Total debt 88.2M at 0.66x equity
  • FCF of 29.1M can reduce debt ~33% annually
Interest expense TTM: 7.75MFree Cash Flow TTM: 29.1MTotal Debt: 88.2M

Operating leverage should improve net margins as revenue scales

1-3ymed
  • Operating margin 22.6% vs 8.2% industry median
  • 93% gross margins provide cushion
  • Revenue 3Y CAGR of 25.7%
Operating Margin TTM: 22.6%Revenue 3Y Growth: 25.7%Net Margin TTM: 1.2%

Valuation Context

Caveats

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