Posted in Europe, Investment Idea, Small Cap Investment Thesis: LONG Kambi (KAMBI.ST LN Equity) Maxim Bogomaz posted on September 29, 2020September 29, 2020 No Comment Kambi is a leading B2B odds and risk management provider for online and retail sports betting to B2C gaming operators, who is well-positioned to capitalise on the legalisation of the US sports betting market. The US sports betting has been legalised in 2018, which created a new market for Kambi with a potential TAM of at least €1.1bn at maturity. The company already has ~14% market share in the US (excluding DraftKings), based on Q1 2020 LTM revenue. Even if Kambi’s market share remains stable, this implies at least 2.5x revenue increase. Furthermore, Kambi will be able to capture more market share, as it has recently secured major operators, such as Penn National and BetAmerica, who are together expected to exceed the current market share of Kambi. At the same time, Kambi will benefit from operating leverage with ~30% EBITDA margin and ~70% incremental margin. Kambi almost does not have any competitors, and its leadership in the industry is protected by high barriers to entry, high switching costs and benefits from economies of scale. The company should be worth at least double in 5 years’ time. Read More
