94% Gross Margin, 24% Net Income margin with 20%+ ROE business and a solid balance sheet, trading at 10x EPS next year's EPS, growing double-digit organically, and actively buying back stock
I like the valuation & the rev/EBITDA growth rates. Good tailwinds with increasing online gambling adoption.
Your Risks#2 is my biggest concern: what'll the affiliate marketing industry look like in the world of LLMs. Can someone ask the chatbot "which websites provide the best odds for <poker/baseball/etc>"? Will there need to be a redirection to gambling.com before arriving at the final destination?
Hard to believe that it is what hurt the stock. Remember that Gambling.com generates revenue from operator-funded promos, advertising is small. In a world of LLM, I believe it is an incremental area of referral for the company, and they are already seeing it and don't need to spend marketing.
This helps reduce their reliance on Google. They also see LLM traffic as being much more high-intent than Google. To activate the deals from the different AI platforms, you'd still need to go to gambling.com's website and activate the promo. It's extremely unlikely that ChatGPT and other AI search products will start generating affiliate revenue from Gambling.
Lastly, it's worth noting that the same bear thesis was floated for Expedia.com and Booking.com, but instead of hurting them, it consolidates demand into the top properties. If a similar thing happens to the gambling website, then GAMB is set to benefit from it.
Truthfully, I think the stock was hurt because it performed extremely well in April relative to the market, and there were expectations of a beat and raises by the market. Instead, they came in line to slightly above and kept guidance intact without raising it due to macro noise.
I like the valuation & the rev/EBITDA growth rates. Good tailwinds with increasing online gambling adoption.
Your Risks#2 is my biggest concern: what'll the affiliate marketing industry look like in the world of LLMs. Can someone ask the chatbot "which websites provide the best odds for <poker/baseball/etc>"? Will there need to be a redirection to gambling.com before arriving at the final destination?
Hard to believe that it is what hurt the stock. Remember that Gambling.com generates revenue from operator-funded promos, advertising is small. In a world of LLM, I believe it is an incremental area of referral for the company, and they are already seeing it and don't need to spend marketing.
This helps reduce their reliance on Google. They also see LLM traffic as being much more high-intent than Google. To activate the deals from the different AI platforms, you'd still need to go to gambling.com's website and activate the promo. It's extremely unlikely that ChatGPT and other AI search products will start generating affiliate revenue from Gambling.
Lastly, it's worth noting that the same bear thesis was floated for Expedia.com and Booking.com, but instead of hurting them, it consolidates demand into the top properties. If a similar thing happens to the gambling website, then GAMB is set to benefit from it.
Truthfully, I think the stock was hurt because it performed extremely well in April relative to the market, and there were expectations of a beat and raises by the market. Instead, they came in line to slightly above and kept guidance intact without raising it due to macro noise.