On Tuesday, Flutter Entertainment (NYSE:FLUT) received a reaffirmation of its Buy rating and $255.00 price target from a major financial firm. The company's first-quarter performance showcased strong growth, although it did not meet the anticipated consensus for revenue. Nevertheless, Flutter's adjusted earnings before interest, taxes, depreciation, and amortization (AEBITDA) exceeded expectations.
Flutter's FanDuel brand has continued to lead the US market, securing a commanding 52% online sportsbook net gaming revenue (NGR) market share. This achievement marks a significant turnaround, with FanDuel's US AEBITDA reaching $26 million, a notable recovery from the $53 million loss reported in the same quarter of the previous year. Additionally, FanDuel's iGaming market share climbed to a record 27%, positioning the company to benefit from future growth opportunities as regulations become more favorable.
The company's financial health was further evidenced by its robust cash flow. Flutter's net cash provided by operating activities increased substantially to $337 million. Its adjusted free cash flow saw a considerable improvement, moving to $157 million from a negative $50 million in the year-ago quarter.
The positive financial results, particularly the dramatic improvement in US AEBITDA and the record iGaming market share, underscore Flutter's potential in the evolving US market. The firm's strong cash flow performance further solidifies its financial stability and supports its growth trajectory.
InvestingPro Insights
As Flutter Entertainment (NYSE:FLUT) garners attention with its robust first-quarter performance and strong market positioning, investors may find the real-time data from InvestingPro particularly insightful. The company's market capitalization stands at a healthy $35.02 billion, reflecting its significant presence in the industry. Despite not having turned a profit over the last twelve months, analysts are optimistic, predicting profitability this year, as indicated by a substantial 24.59% revenue growth in the last twelve months as of Q1 2023. Additionally, with a gross profit margin of 47.4%, Flutter demonstrates its ability to retain a significant portion of its revenue as gross profit.
InvestingPro Tips highlight that Flutter operates with a moderate level of debt, suggesting a balanced approach to financing its operations. Moreover, the company's short-term obligations exceeding liquid assets may call for a closer examination of its liquidity management. Investors should note that Flutter is trading at a high EBITDA valuation multiple, which could be indicative of the market's high expectations for future growth. For those looking for more in-depth analysis, there are 10 additional tips available on InvestingPro, which can be accessed with a special offer using the coupon code PRONEWS24 for an extra 10% off a yearly or biyearly Pro and Pro+ subscription.
The InvestingPro Fair Value estimate stands at $201.3, while analysts have set a higher target, suggesting potential room for growth. With a large price uptick of 29.1% over the last six months, Flutter's stock performance has been strong, and the company does not currently pay a dividend, which may appeal to investors focused on capital appreciation. Flutter's next earnings date is slated for May 14, 2024, which will be a date for investors to watch closely.
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