Is 888 Holdings PLC Stock Buy or Sell?

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Playing the odds at a casino is no easy feat and neither is playing the stock market. When you buy shares in a company, chances are you’re looking to buy low and sell high. There is, however, always the chance that the stock price falls lower than what you purchased it for, and you’re left in the lurch.

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Shareholders of 888 Holdings PLC are likely celebrating in the streets after stocks in the company hit an all-time high last month, soaring nearly 227% in the last year alone. Does this significant growth show long-term investment potential? Or is this a fluke in the market due to pandemic-related global upheavals? Let’s find out.

 

All about 888 Holdings PLC

What is 888 Holdings anyway? Well, if you’ve ever played at an online casino, online poker, or tried your luck at sports betting, you’ve probably come across this betting behemoth.

888 Holdings PLC, most commonly referred to as 888.com is an iGaming conglomerate. Together with its subsidiaries, it provides online gaming entertainment products and solutions on a global scale. Its three main components include 888casino, 888poker, and 888sports.

Founded in 1997 by Israeli entrepreneurs and based in Gibraltar, 888.com has morphed and grown significantly over its lifespan. The last year, however, is when the company’s growth really started to turn heads, likely due to the Covid-19 pandemic and more people gambling from home.

 

888 Holdings PLC at an all-time high

At the end of March 2021, 888 reported its full-year revenue figures to the London Stock Exchange and investors were amazed to discover the massive growth in the company over the last year. The company saw growth of its share price to 279.50 pence per share (in March), which values the company currently at £995.08 million

Before the final numbers were in, revenue estimates for 888 Holdings were at $785 Million USD. When the smoke cleared and the final numbers were in 888 reported $864 Million USD which bumped the statutory earnings per share about 600%. That’s definitely a cause for celebration and a second look.

The casino sector of 888.com was definitely the winner, revenue-wise, with figures triple that of the other two elements. The growth, however, was across the board. 888’s casinos saw a 27% growth and sports saw a 49% jump from year to year, with one-digit percentile growth in poker and bingo.

With an all-time high revenue reported analysts are perking up and giving 888 another look, and a much better forecast for the future.

 

Assessing value in the stock market

It’s not always easy to assess the value of a company relative to the share price. That’s why the success of publicly traded companies is usually estimated using a model known as the Price-to-Earnings Ratio or P/E Ratio. This ratio measures its current share price relative to its per-share earnings (EPS).

888 Holdings saw growth in their EPS by 13% in the last twelve months. It should be noted, however, that this EPS growth is considerably lower than the 227% increase in the share price. So it’s fair to say that the market has a more favorable appraisal of 888 now than it did a year ago.

 

Stock forecast for 888 Holdings PLC

888 is very popular online but the competition is fierce with new online and established land-based players now starting to work aggressively online. It’s for this reason and other industry-related issues, that most analysts suggest investors maintain a “strong hold” position on their stocks for the time being.

Although the market has always been a place of fluctuation and contention, stock analysts agree for the most part that 888 is going to grow over the coming years. The most bullish and bearish estimates of 888 are actually very similar and both are estimating continual growth in stock price over the next few years.

The only caveat is that the estimates for the industry as a whole are much higher than 888’s. Recent earnings reports have pushed 888 Holding’s estimates higher, but their growth wasn’t in line with the astronomical growth of the industry as a whole. The online gaming industry is set to explode while 888 is rising steadily.

Other stocks within the industry may be more valuable in the short term, but analysts agree that 888 Holdings will continue to see growth over the course of the next 4 years. How that plays out will be interesting to watch.

 

What does all of this mean for investors?

888 Holdings is set to grow. The time for buying a few shares for pennies and selling them later for retirement has passed. However, 888 looks to continue steady growth over the next several years as they update their infrastructure in tandem with the gaming industry.

It’s worth looking into, doing your due diligence, and possibly adding 888 to your portfolio while the online gaming industry and 888 are seeing steady growth.

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