CRM Reddit Mentions | ChartExchange

Flutter the Amazon of gambling is on a huge discount in my opinion!
This is not for the ESG themed investors of course.
Flutter already started market making for major 3rd party predictions market CEO confirmed at JPMorgan fireside chat.
Probably HOOD or Kalshi.
They also own the Betfair Exchange since decades which is the same as prediction market but with odds a p2p gambling exchange platform with Back vs Lay.
Essentially it's the same as prediction markets Yes vs No.
They are natural fit for market making in the sports theme of predictions.
They are in beta mode in the UK with Betfair Predicts. UK prediction markets under gambling license. I think this is just a big optionality as an extra.
Flutter owns Fanduel, Betnacional in Brazil, Betfair x Paddy Power, Sky Gaming, Sisal, Snai, Sportsbet, PokerStars to name a few.
They are the no 1 sportsbook and igaming company in US, UK, Italy and Australia.
You get a company the number 1 in the sector for ntm ev/ebitda 10x, p/s 1, ev/revenue 1,5. Still growing 17%, with a peg of 0,2.
This is a complicated company for most retail investor...
Fox has an 18% call option in Fanduel only till 2030 for 4,5B at current prices compound escalator of 5% annually.
Which Fox plans to trigger as they claim they don't leave 2B on the table ( words by Fox CEO) so he Values only Fanduel more than 25B-30B for sure and the whole Flutter is currently at 26B EV with 16B market cap and 10B net debt.
Of course for Fox to be able to have this call option triggered they need licenses in all jurisdictions.
But Iike I said this is a complicated company in a complicated segment lots of M&A and ESG etc.
So if Flutter keeps the sum if 4 quarters positive gaap net income it will join the S&P 500 I think within the next 1-2 years max once they have 4 quarters consecutive Gaap earnings in positive.
They moved to the US primary listing to the NYSE not for vanity and fun from London and they just announced delisting from LSE.
Flutter has an ongoing 5B multi year buyback of 5B.
They already executed 5x 250 million tranches.
Morningstar.com fair value : 245$
2030 returns:
If Flutter prints base case a 25B revenue With 20% Ebitda margin so 5B ebitda with a 10x conservative ev/ebitda we looking at 50B EV minus keeping 10B debt thats 40B equity value.
That's 130% return on a very conservative base case.
If Flutter pays down 5B debt in the next 3-5 years we look at 45B equity value a close to 155%. Still with a highly realistic modest base case.
If Flutter achieves the 2030 consensus estimate of 5,6B ebitda with a little higher and fairer valuation of 12x ev /ebitda we look at 67B EV let's say minus 7B debt we look at market cap of 60B.
That's 240% on today's market cap valuations.
Not even factoring in the net SBC/RSU positive buybacks.
Draftkings is valued at 15x EV/EBITDA for comparison.
This is why Dart is buying heavy.
Bull case can go a lot lot higher 300-500%+
Both revenue and margins but I think higher revenue is a more realistic scenario than 25%+ ebitda margins.(due to state taxes).
If they can shrink float significantly next 1-2 years and cut costs and US matures with DKNG and Fanduel duopoly no more promo wars, NY and other states igaming legalizing. ( no calculations for CA and TX as those are extremely unrealistic and an extreme bull case scenario) hit 21-26 eps with a 20- 25x PE multiple
Then we look at 400- 650$ share price.
Or they hit 28B revenue with 25% Ebitda margins 7B ebitda with a still conservative 10-12x ev/ebitda that' a 70-84B EV
with a 15x Ev/ebitda 105B EV.
Minus the debt let's say they keep at 10B net debt we get 90B equity value.

Bear case is stagnation/taxation with various metrics 100-150$ price.
Assimetric risk reward.
Bear in mind once Trump as president is gone it's highly realistic that prediction markets on sports will be banned and won't be under the CFTC as it's ridiculous to judge as " insurance swap" a combo parlay on a sport game the same way we treat commodities.
Essentially it's the same as a sportsbook. The only reason they are legal nation wise is due to Trump Jr involvement in Kalshi and Polymarket in my opinion.
But this actually hurts Flutter and Draftkings short term but this is also a cheap customer acquisition tool for their own predictions market apps like Fanduel predicts and Draftkings predicts.
I think there will be more states legalizing igaming in the next 5 years which is not even included in any base case analysis.
So even mathematically this company is mispriced to the 2030 bear case or even below currently, plus I assume Dart knows a few things we don't and has intel infos or even more detailed analysis via his lawyers and analysts on further states legalizing igaming due to state deficits etc.
At the current market it's rare to find these type of mispriced assets.
Even if you are a technical chart analyst this company has been around this prices at 2022 and bounced back strong the same around 2020.
Are there risks? Yes highly regulated environment and taxed.
Is ESG friendly? Sadly no.
But in the end we are all adults and can decide how we entertain ourselves.
Is taxation a moat?
Yes I believe so there is a reason why many countries won't enter the UK and the US only the largest companies with scale can make it work in these countries profitable the mid and low tier operators will fail.
The risk reward is assimetric I truly think and there is no risks like with Adobe CRM and other software names.

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