NEW $58.00 Sum Of The Parts Valuation (future 12 months) On Jan 16th, I posted a sum of the parts valuation for PBL that should stand as a baseline valuation. The estimates I used from previous annual results have been more than validated. If we put in the new EBITDA value of 91M (and look forward 12 months) we could see an EBITDA for the end of 2024 well in excess of 100M (they just reported 13% y-y growth).
The iLottery business contributed 54% of the EBITDA (and is rapidly growing as a percentage of total EBITDA). So if we carry the 54% EBITDA contribution forward the the next 12 months then the sum of the parts valuation looks as follows,
New 12 month valuation could look like
BASE BUSINESS VALUE
EBITDA 46M (46% of expected 2024 EBITDA $100M)
EV/EBITDA Multiple 12x
EV = 46Mx12 = 552M
DEBT = 120M (according to SEDAR annual financial statement filing filed today)
Equity Value = 552M-120M = 432M
Share outstanding 27M
Base business equity value / share = 432/27=$16.00
Now for the more interesting part, the iLottery Valuation
ILOTTERY BUSINESS VALUATION
ILottery Op Inc / EBITDA 54M (54% of 2024's 100M EBITDA estimate)
EV/EBITDA Multi 21x (using the neogames current multiple of 21.6x)
EV = 54x21 = 1,134M
No Debt so EV = Market Cap = 1,134
Shares outstanding 27M
Implied iLottery Value / Share = 1,166/27 = 42.00
So, if we combine the base value / share of $16.00 with standalone iLottery value / share of $42.00 we arrive at a sum of the parts valuation of $58.00/share
I think the sum of the parts approach is relevant and valid given the very different growth / operating income % and potential for further growth.