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Firstly, since GAMB is a crappy, small cap (which I do own- so I am biased), What is it?
tl;dr **(so long as they can maintain their core business** (which for now is growing), and management doesn't issue shares as part of their earn outs, they are extremely cheap and make so much money that long term the stock can't stay low(unless their core business dies randomly, which so far it is not) fair value I see is \~$10,
Basically, they are a serial acquirer, that specializes in affiliate marketing based on having high value website domains. **\*\*They recently spent \~100% of their market cap on new businesses I will mention after this\*\*** Their business relies on google caring what your URL is, and prioritizing it, which, may not be the case going forward. They have spent millions of dollars on high impact names like [gambling.com](http://gambling.com), [bookiess.com](http://bookiess.com), etc, which has generated tons of free, high margin traffic. Lately, it seems that whether you own [gambling.com](http://gambling.com), or [gambliing.com](http://gambliing.com), google is starting to care less and recommending either equally, and their portfolio of "high value" websites is starting to require more and more advertising to maintain their revenues, which I think is a fair concern, especially as advertising costs went up by 60% (OUCH)
so, short story, their old business was printing money, and is now requiring more and more ad spend in order to do well on search rankings, which is why they were so cheap compared to their revenues/income.
Now, what is their pivot, and why is it so impactful (in my opinion), well they just spent **160 MILLION dollars** (market cap of 150mil rn) (it was less but with earn outs, which they all hit, so they owe it all), so 160 MILLION on buying oddsjam and optic odds, which are very high margin, recurring revenue arbitrage/odds data providers. This is growing massively, and has already hit all earn outs for the contract. The business, plus their smaller acquisitions, are adding roughly 16mil/year in fcf, and around 65mil in revenue, and still growing/much more consistent as its subscription revenue.
so now lets get to the numbers (I think these are kinda useless tho considering their staggering debt, which is their biggest weakness, although, its definitely very manageable.
Forward P/E \~10.5x
Forward P/S \~1.02x
EV/EBITDA \~5.1x
PEG Ratio \~0.85
Price/Book \~1.1x
Now, lets consider their TRUE enterprise value, assuming all earn outs are met, this leads to a total debt load of 150mil+, which leads us to an enterprise value, today, of slightly under 300mil, or about 290, (sure some of these acquisitions can be funded through stock, but management said this won't be done at current stock prices, so we can ignore that)
Multiples now, are
EV / Revenue 1.76x
EV / EBITDA 5.0x
EV / Free Cash Flow 7.3x
which is still so fricken cheap.
imo, this stock just needs to not issue shares in order to pay their earn outs, and if they can stay stagnant in their core business, or moderately decline, so long as they never have revenue implode, this will be a 2-3x,
based on.
(8x 2026 EBITDA)
Enterprise Value: $544.0M
Total Debt & Earn-outs: ($156.5M)
Cash: $7.9M
Implied Equity Value: $395.4M
**Fair Value Per Share: $10.83**
or using a DCF, assume a 5% terminal growth rate, and a 12% discount rate
**Fair Value: \~$12.40 per share.**