On Monday, B.Riley maintained a Neutral rating for PlayAGS, Inc. (NYSE: AGS) with an unchanged price target of $12.50. The firm's analysis suggests a steady outlook for the gaming equipment company, citing ongoing product momentum and growth in its interactive segment.
The firm has adjusted its earnings estimates for PlayAGS, raising its forecast for EBITDA in the calendar years 2024 and 2025. The updated EBITDA estimates are now $176.6 million for 2024 and $185.5 million for 2025, up from the previous estimates of $175.0 million and $179.5 million, respectively. This revision reflects PlayAGS's continued success in cabinet and content development, alongside an acceleration of revenue in its interactive segment.
PlayAGS has also recently achieved a milestone in its corporate journey. On August 7, the company's shareholders approved the pending sale to private equity firm Brightstar Capital Partners. This development is a significant step towards the completion of the acquisition.
As of September 6, PlayAGS's shares are trading at approximately a 10% discount to the acquisition price agreed upon with Brightstar Capital Partners. The price is set at $12.50 per share, which aligns with the price target set by B.Riley.
The firm anticipates that the transaction, known as the BH25E deal, will close without significant risks. B.Riley's current stance on PlayAGS remains Neutral, signaling a wait-and-see approach as the company heads towards the expected completion of its sale.
In other recent news, PlayAGS, Inc., a global gaming industry supplier, has received approval from its stockholders for acquisition by Brightstar Capital Partners, a private equity firm with a broad investment portfolio. This major development was announced following a special meeting of stockholders, with the transaction expected to close in the latter half of 2025, pending regulatory approvals and customary closing conditions.
Post-acquisition, AGS will transition from a public entity to a privately held company, leading to the delisting of its common stock from public markets. Brightstar Capital Partners, known for its investments in various sectors including industrial, manufacturing, and services, plans to utilize its operational expertise and relationships to enhance the value of AGS.
These are among the recent developments in the company's business operations.
InvestingPro Insights
PlayAGS, Inc. (NYSE: AGS) has been the subject of financial analysis and market reviews, with recent data from InvestingPro showing a nuanced picture of the company's valuation and performance metrics. The company boasts a substantial gross profit margin of 70.31% for the last twelve months as of Q2 2024, underscoring its ability to maintain profitability in its operations. Despite concerns over net income expectations, PlayAGS's liquid assets have surpassed its short-term obligations, indicating a solid liquidity position which can be crucial for future investments and managing debts.
InvestingPro Tips highlight that PlayAGS is trading at a high earnings multiple, with a P/E ratio of 102.5, and a slightly adjusted P/E ratio of 72.86 for the last twelve months as of Q2 2024. This suggests that the market has high expectations for the company's future earnings. However, it's important to note that the company's stock price movements have been quite volatile, with a significant 6-month price total return of 25.47% and a 1-year price total return of 64.91%, reflecting strong recent performance but also potential risks for investors.
The company's stock is currently trading near its 52-week high, at 96.13% of this threshold, which could indicate confidence from investors or, conversely, a potential reevaluation of its stock value. For prospective investors, PlayAGS's current market capitalization stands at $454.49 million USD, providing a sense of the company's size and market value.
For those looking for more detailed analytics and insights, InvestingPro offers additional tips on PlayAGS, with a total of 14 tips available on the platform, which can help investors make more informed decisions by considering various financial aspects of the company.
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