Inspired Entertainment (NASDAQ: INSE), while not the household name it once was in gaming, has recently begun attracting attention among analysts who feel its performance and potential are worthy of notice. Now may be its time for growth! As of Monday, this manufacturer and provider of video gaming terminals and software clocked an increase of 16.67% month over month; suggesting it has caught the interest of more investors and analysts alike. B. Riley analyst David Bain highlighted its impressive third quarter earnings before interest, taxes, depreciation and amortization (EBITDA), with notable structural margin improvements seen within its gaming and leisure segment.
Bain noted, “the third quarter of 2024 saw significant improvements to structural margins within its gaming and leisure segment, coupled with 47% Interactive EBITDA growth driven by 40% top-line growth and expanded margins, underscored Bain’s robust performance.”
Bain rates Inspired Entertainment as a “buy,” setting an ambitious $21 price target that more than doubles its current worth.
Expansion and Growth in Inspired’s Interactive Unit
Inspired Entertainment has made interactive gaming an essential element of its growth strategy, thanks to an outstanding content library that positions Inspired to take full advantage of opportunities that arise for rapid expansion within this field.
Inspired is also making substantial strides in the lucrative iGaming sector, according to Bain. Inspired has recently inked hybrid table game deals with leading operators like BetMGM, Caesars and FanDuel across various countries – including in America itself.
Bain continues by noting Inspired’s impressive 40% revenue growth was driven by margin expansion despite increased expenses associated with their forthcoming Brazilian launch before year end. New games, combined with an optimized game release roadmap and expanded international presence like Italy as well as planned entry to Peru and South Africa this quarter have further strengthened Inspired’s position and contributed significantly to this impressive figure.”
Italy and Brazil – two key markets for European gaming firms like Inspired. Both provide significant growth potential.
Potential Strategic Moves for Inspired
Inspired Entertainment may look to asset sales to increase liquidity and shareholder value – an approach increasingly adopted by gaming entities. Although its holiday park division had initially seemed imminent for sale, its substantial free cash flow benefits may delay such actions; but according to Bain Consulting it remains possible; they suggest Inspired’s strong cash position gives them leverage when timing or pricing potential sales of this segment.
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