Bragg Gaming is heading to $14, says Haywood

Bragg Gaming Group (Bragg Gaming Group Stock Quote, Charts, News, Analysts, Financials TSX:BRAG) remains well off its highs set two years ago when the stock topped out at just under C$30 per share. But while reaching those heights may still be a ways off, BRAG’s growth as it enters new North American markets should propel the stock forward — that’s the thesis from Haywood Capital Markets analyst Gianluca Tucci, who provided an update to clients on Monday where he reiterated a “Buy” rating on BRAG and a 12-month target price of C$14.00.

Bragg is an iGaming tech and titles provider for online and land-based gaming operators, offering a range of exclusive content as well as casino titles from partner studios. The company announced on Monday a partnership agreement with Betsson Group, one of Europe’s largest online gaming companies. Betsson holds gaming licenses in 19 jurisdictions and has over 1,800 employees across ten locations, with 1.1 million active customers as of last filing and 25.6 million registered customers. 

Bragg said it will be providing Betsson with a full range of content via direct integration with its remote gaming server (RGS), giving access to players across Betsson’s brands. 

“An operator that offers over 20 of the online industry’s most popular brands, Betsson Group is a considerable partner to ally ourselves with,” said Bragg President and COO Lara Falzon in a press release.

“We’re delighted to announce the news and especially so as we have much more to reveal throughout the year as we place our content in front of a wider and more diverse global player base,” Falzon said.

Commenting on the announcement, Tucci noted Betsson’s consensus revenue projection for 2022 is over US$800, with about 68 per cent of its revenue coming from casino product. 

“Betsson recently reported all-time highs in casino gross turnover and revenue in Q3/22,” said Tucci. “We view this content deal as accretive to BRAG’s growth plans with an expected go-live date in Q2/23.”

Tucci said he is leaving his revenue estimates unchanged at the moment although they are biased upwards in anticipation of further guidance commentary on the company’s fourth quarter earnings call in March.

“This major deal follows BRAG’s recent news of launching content with BetMGM in Michigan, rolling out with DraftKings in New Jersey and going live with Napoleon Sports and Casino in Belgium,” he said.

Tucci is calling for Bragg to hit full 2022 revenue and adjusted EBITDA of €80.0 million and €10.6 million, respectively. At press time, his C$14.00 target represented a projected return of 159 per cent.