• Home
  • News
  • Features
  • February stock market sweep: Penn, Acroud and Kambi falter on results
igamingnext photo
February marked the height of the Q4 2023 reporting season, and the three biggest underperformers on the stock market fell short of investor expectations.

Penn Entertainment

Penn Entertainment experienced a significant share price drop in mid-February after the company reported its Q4 2023 results, with revenue and operating margin falling short of Wall Street’s estimates.

The stock did not recover from this drop, and Penn’s share price fell 18.85% to $18.30 over the course of the month. 

In Q4 2023, Penn experienced a greater-than-expected net loss due to a significant influx of first-time depositors, which drove up promotional expenses, particularly within the ESPN Bet brand.

This led to a 12% year-on-year decrease in revenue to $1.4bn for the quarter. 

Consequently, the company reported a net loss of $358.8m, in contrast to the $20.8m profit recorded in the corresponding period of the previous year.

Overall, this amounted to a $1.75 loss per share. This figure came in worse than Wall Street expectations, where a loss of $0.57 was projected according to seven analysts polled by Zacks Investment Research.

Penn, however, remained positive, with CEO Jay Snowden focusing on the opportunity going forward:

“ESPN Bet has also attracted the mass market sports fan, highlighting the potential to expand the appeal of sports betting and grow the overall market.

“This foundation sets the stage for continued growth and market share gains as we introduce further product enhancements and deeper integrations into the ESPN media ecosystem,” Snowden said at the time. 

Acroud 

In the affiliate category, Acroud saw the biggest decline as its stock value decreased by 25.93% in February. 

Acroud also reported its Q4 2023 results during the month, which revealed a mixed bag of performance metrics.

While revenue amounted to €9.9m, aligning closely with the previous year’s figures, adjusted EBITDA decreased 44% year-on-year to €1.4m. 

New depositing customers (NDCs) fell by 46% to 45,627.

However for full-year 2023, Acroud reported revenue of €39.4m, corresponding to year-on-year growth of 27%.

Adjusted EBITDA decreased 16% year-on-year to €6.3m, while NDCs reached an all-time high of 327,921, up 76% on 2022’s figure.

“Our decision to diversify the business three years ago has proven to be correct,” said CEO Robert Andersson. 

“Considering the challenges traditional SEO business faces, due to changing search engine algorithms and the increased introduction of AI technology, Acroud has successfully adapted its business model. 

“Today, our core business consists of media buying, media partnerships, SaaS solutions through our platform Voonix, the affiliate network Matching Visions, and our streaming operation The Gambling Cabin.”

However, investor sentiment didn’t align with Andersson’s optimism, as Acroud’s share price hit a new 52-week low yesterday (12 March), sinking to SEK0.914.

Kambi

February also proved to be a challenging month for Kambi as the supplier experienced a 22.72% decline in its share value.

At the start of the month, Kambi shares were valued at SEK139.50, but by month-end, they had experienced a substantial drop to SEK107.80.

The most significant downturn (21%) occurred on 21 February following the release of the company’s Q4 2023 financial results, which revealed a decrease in both revenue and profit. 

Revenue for the quarter stood at €44.3m, marking a decline of 23.4% year-on-year, while the firm’s operating profit fell 61.5% to €7.2m.

CEO Kristian Nylén said he was “not satisfied” with the company’s financial performance, which was impacted by “lower than anticipated revenue from Shape Games, smaller than expected revenue contributions from two of our largest partners, and Bally’s more measured approach to marketing its sportsbook thus far.”

He added, however, that the company made “good progress in building the foundations that will ultimately lead to a much-improved financial performance in the future.”

Those foundations include the signing and extending of Kambi’s partnership agreements, alongside improved cost control.

Over the past year Kambi, a longstanding darling of the investment community, has encountered a substantial setback. 

Its stock value has tumbled by 42.48% on a trailing 12-month basis.

Similar posts