Gambling Group Stock Target Lowered in Q3 Earnings Preview (GAMB)

Gamblingcom Group's stock (NASDAQ:GAMB) is moving slightly higher this morning, up 1.9% in the pre-market despite Jefferies cutting its price target on the stock, reflecting concerns about the online gaming space and the company's evolving strategies.

The adjustment comes as part of a broader Q3 preview for the sector, against a backdrop of negative sentiment stemming from prediction markets and overall risk aversion in the broader market.

Jefferies lowered the price target to $13 from $15, while maintaining a “Buy” rating on the shares. This adjustment acknowledges the challenges Gambling.com faces, including a revised strategy concerning its affiliate business. The firm also reduced fiscal year 2026 estimates to align with this new approach. Despite the near-term concerns, Jefferies views Gambling.com's acquisition of OddsHoldings as a positive development with long-term benefits, indicating confidence in the company's strategic vision.

This isn't the first time Jefferies has adjusted its price target for GAMB in recent months. In August, the target was lowered from $18 to $15, driven by multiple contraction in valuation metrics like EV/Sales and EV/EBITDA. Before that, in July, a similar adjustment occurred, reducing the target from $20 to $18 due to a slight decrease in the EV/EBITDA multiple. These revisions highlight the sensitivity of the company's valuation to shifting market conditions and sentiment.

However, earlier in May, Jefferies had increased the price target to $20 following the acquisition of OddsJam. This acquisition was seen as a strategic move to enhance the company's product offerings and boost recurring subscription revenue by an estimated 20%. The varied adjustments underscore the complex interplay between strategic acquisitions, market sentiment, and financial performance in determining Gamblingcom's stock valuation.

The series of price target adjustments by Jefferies illustrates the dynamic nature of Gamblingcom's financial landscape. While recent revisions reflect concerns about market conditions and strategic realignments, the sustained “Buy” rating suggests continued confidence in the company's underlying potential.

The market's reaction to these adjustments will likely depend on Gamblingcom's ability to execute its revised strategy, integrate acquired assets effectively, and navigate the broader challenges facing the online gaming industry.

Ultimately, the lowered price target reflects a cautious outlook for Gamblingcom in the near term, but the “Buy” rating signals that the company's long-term prospects may still hold promise, contingent on strategic execution and market recovery.