Benchmark reaffirms buy rating on Gambling.com stock amid prediction market potential

Benchmark reiterated its Buy rating and $18 price target on Gambling.com (GAMB), citing potential upside from federally regulated prediction markets and their potential to accelerate broader iGaming adoption. GAMB's Q1 2025 results showed record revenue of $40.6 million and adjusted EBITDA of $15.9 million, up 56% year-over-year, with sports data services revenue surging 405% due to acquisitions; analysts from Benchmark, Stifel, Macquarie, and Texas Capital have maintained or initiated Buy/Outperform ratings on the stock.

Analysis

Benchmark has reiterated its Buy rating and $18.00 price target for Gambling.com Group Ltd. (GAMB), primarily driven by the company's potential to capitalize on the emergence of federally regulated prediction markets. These markets are viewed as a potential catalyst for accelerating online sports betting legalization in currently prohibited U.S. states, with operators like Kalshi, and potentially DraftKings and Flutter, expected to compete in this new vertical. The zero-tax structure of prediction markets could also discourage excessive state-level gaming tax hikes, benefiting existing operators. Gambling.com is positioned for "outsized upside" if these trends lead to broader iGaming adoption, especially considering approximately half the U.S. population already has access to online sports betting. This outlook is supported by GAMB's strong financial health, reflected in an InvestingPro "GREAT" score, impressive gross profit margins of 94.55%, and robust revenue growth of 24.67%. Further bolstering this view, Gambling.com reported record first-quarter 2025 revenues of $40.6 million, slightly exceeding estimates, and an adjusted EBITDA of $15.9 million, a 56% year-over-year increase. A significant contributor was the sports data services segment, which saw revenues surge 405% to $9.9 million, largely due to the acquisitions of OddsJam and OpticOdds. Analyst sentiment remains positive, with Benchmark and Stifel maintaining Buy ratings at $18.00, Macquarie an Outperform at $18.00 (revised from $19.00), and Texas Capital initiating coverage with a Buy rating and a $17.00 price target. Management has reiterated full-year 2025 guidance, projecting revenue between $170 million and $174 million and adjusted EBITDA of $67 million to $69 million, underscoring a strategic focus on combining marketing with sports data services to fuel growth.

Key Decisions for Investors

• Investors should assess Gambling.com's growth trajectory in the context of potential U.S. iGaming expansion driven by prediction markets, considering the company's strong Q1 2025 performance and reaffirmed full-year guidance.
• Monitor the integration and continued performance of acquisitions like OddsJam and OpticOdds, as the sports data services segment is a key driver of recent revenue acceleration and strategic diversification.
• Consider the consensus Buy/Outperform ratings and price targets from multiple analysts, alongside the company's high gross profit margins and strong financial health, when evaluating GAMB's current valuation and future prospects.