BTIG lowered its price target on SGHC Limited to $16.00 from $19.00 while keeping a Buy rating after the company reported third-quarter results. The stock trades at $11.55, below the new target.
Super Group Limited beat BTIG's revenue and EBITDA expectations but fell short of peer forecasts for the quarter. Third-quarter headwinds cut revenue and EBITDA by $40 million and $25 million respectively. A regulatory shift in Namibia pushed the market launch to the first quarter of 2027 from the prior fourth-quarter 2026 expectation, affecting guidance by an estimated $5 million to $10 million.
BTIG now forecasts 2027 growth at the low end of the 10% to 12% range from last year's investor day. The firm reduced its valuation multiple to approximately 9x EBITDA to match the upper end for international gambling operators. SGHC trades at 8.58x EV/EBITDA with a PEG ratio of 0.18.
BTIG cited recent regulatory developments in Brazil, perceived risk of tax increases in South Africa, and lack of intraquarter Africa data reports as factors weighing on near-term investor appetite. The firm sees potential upside from organic growth and new market launches across Africa and internationally.
Third-quarter revenue reached $611 million, up 10% from the prior year. Adjusted EBITDA rose 8% to $165 million, exceeding consensus by 2.8%. Sports margins contracted to 12.1% from a 24-month average of 13.7% due to unfavorable outcomes. Casino business revenue and adjusted EBITDA each grew 10% and 8% respectively.
StoneX also cut its price target to $16.00 from $20.00 while maintaining a Buy rating, citing the Namibia launch delay.
Investors monitoring SGHC should watch for updates on the Namibia market launch timing and regulatory developments across Brazil and South Africa that could affect margins and valuation multiples.