Gambling.com Group Downgraded to Hold from Buy by Truist Securities.

Gambling.com Group Downgraded to Hold from Buy by Truist Securities.

Gambling.com Group Ltd. (NASDAQ: GAMB) faced a significant change in analyst sentiment as Truist Securities downgraded the stock from a Buy rating to Hold. The downgrade comes amidst a challenging period for the company, marked by headwinds in its core search business and strategic pivots toward new monetization models [1].

In the second quarter of 2025, Gambling.com Group reported impressive financial results, with earnings per share (EPS) of $0.37, exceeding expectations by 117.65%. The company achieved a 30% increase in revenue year-over-year, reaching $39.6 million, and saw gross profit rise by 27% to $36.9 million, maintaining a robust margin of 94.55% [2]. Despite these strong earnings, the stock experienced a temporary decline of 3.98% during regular trading but rebounded 1.3% in after-hours.

BTIG, another analyst firm, had previously lowered its price target on Gambling.com to $12.00 from $19.00, citing pressure on the company’s core search business. The firm maintained a Buy rating but noted that market uncertainty might weigh on the company’s valuation during this transition period [1]. Truist Securities' downgrade reflects a more cautious outlook on the company's future prospects.

Gambling.com Group expects revenues between $171 million and $175 million for the following year, representing an anticipated 36% annual growth. Adjusted EBITDA is forecasted to range from $62 million to $64 million. The company maintains a moderate debt-to-equity ratio of 0.63, indicating sufficient cash flow to cover interest expenses and enable further investments [2].

The company's strategic pivot toward new channels and monetization models is expected to eventually compensate for search-related revenue gaps while maintaining margins in the 35-40% range. However, the transition period may present near-term challenges, with core operations now projected to grow approximately 6% in 2026 and 7-8% in 2027-2028 [1].

Despite near-term challenges, Gambling.com Group maintains strong financial health with an overall score of "GREAT" and robust revenue growth of 24.67% over the last twelve months [1]. The recent acquisition of Spotlight.vegas is projected to generate $8 million in revenue by 2026 and further enhance the company’s sports data services portfolio.

Gambling.com Group's stock remains undervalued based on its financial health and growth prospects, with fair value analyses suggesting potential value opportunities. However, the recent downgrades and market uncertainties indicate that investors should exercise caution and closely monitor the company's progress in the transition period.

References:
[1] https://www.investing.com/news/analyst-ratings/gamblingcom-stock-price-target-lowered-to-12-at-btig-on-search-headwinds-93CH-4194798
[2] https://www.newsnet5.com/news/gambling-com-group-q2-2025-strong-financial-growth/