On Wednesday, BTIG adjusted its price target for Flutter Entertainment (NYSE:FLUT) shares to $245.00 from $242.00 while maintaining a Buy rating.
This decision follows the company's first-quarter financial results, which presented a mixed picture compared to BTIG's forecasts, with revenue falling short but EBITDA surpassing expectations.
Flutter Entertainment's Q1 performance highlighted a significant revenue shortfall in the U.S. market, which was lower than both the company's and investors' projections.
The results were influenced by a combination of factors, including unfavorable outcomes in late March 2024, a $76 million drag, challenging comparisons with the previous year, and increased promotional expenses related to the North Carolina launch.
Despite the revenue miss, the market quickly digested the variance attributed to luck, and underlying results were slightly ahead of pre-announcement expectations.
The U.S. revenue, excluding certain headwinds, grew by 51.5% year over year, outperforming the mid to high 40s percentage growth expected by the buy-side. EBITDA would likely have surpassed estimates if not for the $76 million setback.
Moreover, the company's forward-looking statements were positive, with a strong start to April, unchanged full-year guidance, and the anticipation of benefits in 2025 from higher customer acquisition spending this year, which is projected to increase by 33%.
There were no surprises in Flutter's performance outside of the U.S. for the quarter. The company is also expected to benefit from a series of upcoming events, including a capital markets day in September, the kickoff of the NFL season, and easier comparisons for the third quarter of 2024 through the first quarter of 2025. BTIG remains positive on Flutter Entertainment's prospects moving forward.
InvestingPro Insights
Following the recent financial updates from Flutter Entertainment (NYSE:FLUT), it's clear that investors are weighing the company's performance and future potential. According to real-time data from InvestingPro, Flutter Entertainment has a market capitalization of $36.24 billion, reflecting its significant presence in the industry. Despite challenges, the company has managed to achieve a robust revenue growth rate of 19.29% over the last twelve months as of Q1 2024, indicating a strong capacity to increase sales. This aligns with the positive forward-looking statements from the company and supports BTIG's optimistic outlook.
Two InvestingPro Tips that stand out for Flutter Entertainment are its expected net income growth this year and the significant price uptick over the last six months, which was 27.81%. These insights suggest that the company is on a trajectory that could appeal to investors looking for growth and positive momentum in stock performance. However, it's worth noting that the company operates with a moderate level of debt and has been trading at high EBIT and EBITDA valuation multiples, which could be points of consideration for more risk-averse investors.
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