TSXV:NYX.DB - Post by User
Post by
petrofacon Mar 07, 2017 9:26pm
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Post# 25948141
Feb 8th 2017 Canaccord
Feb 8th 2017 Canaccord Kevin Wright As expected, news continues to flow from one of the largest gaming conferences, ICE Totally Gaming, being held in London. NYX Gaming announced that it has added Mr. Keith O'Loughlin to the OpenBet team as Executive Vice President - Sportsbook. Mr. O'Loughlin was previously Sportsbook director with Ladbrokes Coral and held the roles of CEO and CTO at Boylesports. Recall that as part of its restructuring NYX announced in November 2016 that OpenBet CEO Mr. Jeremy Thompson-Hill was stepping down but that he would remain as an advisor to the company (OpenBet CEO stepping down but not leaving). It appears that the company is making strides in its restructuring, and we believe that attracting a seasoned sportsbook executive reflects well on the quality of OpenBet.
Investment highlights
* NYX adds experienced gaming executive. NYX Gaming announced today the hiring of Mr. Keith O'Loughlin for the role of EVP Sportsbook. Mr. O'Loughlin was previously with Ladbrokes Coral as Sportsbook director and his LinkedIn profile indicates that he was recently chief product officer at the company. His resume includes experience in sportsbook, technology and a degree in Management Science and Information Systems Studies from Trinity College Dublin. Mr. O'Loughlin will report to COO Mr. Jason Walbridge and is expected to join the company later this year in the London offices.
* ICE Totally Gaming conference is newsy. As we have indicated in the past, the ICE Totally Gaming is an important conference and as such tends to be an event where gaming companies release pertinent news pieces. Simon Davies wrote on the acquisition of Eyecon by Playtech yesterday (Eyes up) and we are not surprised to see news stories from NYX Gaming. The conference is in day two of three, so we would not be surprised to see more announcements come out of the event, whether corporate or product announcements.
* Upcoming potential catalysts include financial reporting. As we highlighted in our note yesterday, we expect that there could be some customer announcements from NYX in the near term; we believe that the meaningful catalysts for the stock in the next six months include F2016E results and Q1/17E reporting. We view it as critical that management shows that it can deliver on continued revenue growth and pull back some of the margin compression experienced in Q3/16. We believe potential new investors are looking for at least two quarters of evidence that OpenBet is delivering results. The company recently announced OpenBet had secured the New Zealand Racing Commission as a customer, which shows that the company continues to win medium- to large-sized contracts and today's announcement shows that it can attract experienced professionals to the company.
Valuation
We consider NYX Gaming to be an undervalued stock. NYX is BUY-rated with a C$4.00 target based on a multiple of 11.5x 2017E EV/EBITDA, a discount to peers at 12.0x. The stock trades at 4.4x 2017E EV/EBITDA