Q2Important things to notice in Q2:
-We all know the GBP has declined 10% against the USD in the last few months. Considering the UK is the most important country to TSG, this will affect earnings. The question is: how much of the currency headwinds are prices in the stock?
-Sports results have been operator-friendly, so this should allow for better profit margins in both the UK and Australia. Will this negate the precipitious fall in earnings from Q1 and will it make up for the currency headwinds? Let's see.
-Organic growth: is poker shrinking again? Is casino growing again? Are Beteasy and Sky taking more market share?
-Russia: Has the payments issue become less of a problem? It hurt Q1, but they said that they have seen the worst of it. Is it better now?
-Gray markets: They pulled out of a few markets like Switzerland and they were having payment processing issues in Poland and some other Eastern European country. How will that affect the results?
-Foxbet: This is perhaps the biggest wild card. If TSG comes out with a bullish forecast, the stock will rally hard. If they continue to call for patience and talk about how much they need to invest, then it won't be good for the stock. The question again is, how much is baked into the stock price.
-Guidance: This will move the stock the most. If guidance is lowered again, the stock will get crushed. If guidance is maintained or increased, I think the stock will rally (moreso if it is increased materially).
If earnings and revenue growth can grown consistently between 10-15% over the next 5 years as they have said, management will gain credibility and the stock is an easy double. If not, then balance sheet issues will come into play and investors will bail.