Flutter Entertainment Stock Soars: Is it the Right Time to Invest?
Gambling has been a popular attraction for people for a long time. However, in recent years, it has taken centre stage in the world of business and investment. Flutter Entertainment, one of the leading gambling companies in the world with a market value of over £37 billion, has been taking the stock market by storm recently. Flutter Entertainment’s share price has been rallying on the back of robust earnings growth that has exceeded market expectations. The question on the minds of investors is whether this is the right time to invest in Flutter Entertainment stocks. In this article, we explore Flutter Entertainment’s financials, growth opportunities, and recent developments to help you make an informed decision.
Flutter Entertainment’s Financials
Flutter Entertainment has been posting impressive financials, which have contributed to the soaring stock prices. In the first half of 2021, Flutter Entertainment’s revenue grew by 98% year-on-year to £3.46 billion. The company’s earnings before interest, tax, depreciation, and amortisation (EBITDA) grew by 53% year-on-year to £1.06 billion. The impressive performance was mainly driven by Flutter Entertainment’s digital division, which includes brands like Paddy Power, Betfair, PokerStars and Sky Bet. It is worth noting that the full year profit forecast for Flutter Entertainment is £1.2 billion.
Growth Opportunities
Flutter Entertainment’s impressive financials can also be attributed to the growth opportunities in the gambling industry, which the company has been capitalising on. One such opportunity is the rise of mobile gaming, which Flutter has placed a high emphasis on. The transition of the industry to online gaming has been favourable for Flutter Entertainment, as its digital division has seen tremendous growth, reaching £2.3 billion in revenue in H1 2021. Another significant opportunity for Flutter Entertainment is the recent trend of the U.S. States legalizing sports betting. Flutter Entertainment has been expanding its business in the US, which is currently the second-largest sports betting market in the world, through its partnership with sports media company, FanDuel. In fact, the digital division’s growth in the US saw a 155% year-on-year increase, reaching £1.08 billion.
Recent Developments
Flutter Entertainment’s latest developments have also attracted a lot of investor attention. Recently, the company has agreed to sell its Oddschecker business to Bruin Capital for £155 million. The sale of Oddschecker was part of Flutter Entertainment’s plans to streamline its business and focus on core areas. Flutter Entertainment has a robust pipeline of mergers and acquisitions (M&A) as well. The latest of these being a proposed merger with Canadian gambling company, The Stars Group, which would make it the world’s largest online betting and gaming company.
Conclusion
Flutter Entertainment’s impressive financials, growth opportunities, and recent developments make investing in their stocks a tempting option. While there may be concerns about the gambling industry’s sustainability and regulations, Flutter Entertainment has exhibited robust growth, particularly its digital division. With a full-year profit forecast of £1.2 billion and ongoing M&A activity, Flutter Entertainment is gearing up for a promising future. However, investors need to consider the risks, uncertainties, and volatility that come with investing in gambling stocks. In closing, investing in Flutter Entertainment stocks now could be worth considering, but always do your own research and consult with a financial advisor.
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