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Aspire Global
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== Summary<ref name=":0">Source: Edison Investment Research.</ref> == Aspire Global (AG) is an online gaming technology, services and content company that offers its customers, online gaming operators, everything that is required to operate a successful iGaming brand. The global online gaming market is experiencing structural growth and AG’s leading technology and services help customers manage the many operational and regulatory complexities of online gaming, while minimising their investment and mitigating their increasing cost pressures. Its success is apparent in its increasing geographic presence (26 markets) and roster of leading online gaming brands. AG is trading at a significant discount to its larger peers; our DCF-based valuation points to a share price of SEK95. '''Well positioned for greater geographic scale''' Following recent acquisitions giving AG a presence across most parts of the iGaming value chain, management’s current strategy has four key pillars: a stronger product offer, organic growth, M&A, and geographic expansion. The aim is to expand its scalable platforms into more markets and increase the number of customers per market, organically and via the acquisition of complementary companies to enhance the offer. AG looks well placed to benefit from the structural growth drivers, and regulatory and operational issues facing its customers. The United States is a particular area of focus. '''FY21: Improving profitability and cash flow''' Edison Investment Research forecasts EBITDA growth of 15% (pro forma) in FY21, and 17% in FY22. Our forecast for EBITDA of €32.8m (using AG’s definition) in FY21 is greater than management’s longstanding (December 2018) guidance of €32.0m due to recent higher-margin acquisitions. Edison Investment Research expects improving free cash flow due to higher profitability while investment levels relative to revenue are maintained. The company has a robust balance sheet with limited net debt (€5.2m) excluding minimal IFRS 16 leases. Its improving financial position could enable the restoration of the dividend in FY21, following a period of M&A. '''Valuation: Well below peers''' AG is trading at a significant discount to the majority of its peers. Its EV/EBIT multiple for FY21 of 10.2x is a 63% discount to an adjusted average of peers, and the P/E of 11.3x is a 74% discount to the adjusted average. A DCF-based valuation with a WACC of 9% and terminal growth of 2% suggests a share price of SEK95. As AG’s scale increases, Edison Investment Research would expect the valuation gap to its larger peers to narrow.
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