Flutter Entertainment (FLUT, Financial) saw its shares rise by 5.26% on recent trading following the company's announcement of its medium-term guidance for 2027 and a significant share repurchase program.
The company, which is a major player in the iGaming and online daily fantasy sports market, has provided an optimistic forecast for 2027. Flutter Entertainment (FLUT, Financial) projects an 8% annualized growth rate in its total addressable market, which is expected to reach a staggering $368 billion. This ambitious growth plan is accompanied by a revenue target of $21 billion in 2027, reflecting a 14% average annualized growth rate from the $14.2 billion revenue guided for this year.
In addition to revenue growth, Flutter Entertainment (FLUT, Financial) also expects significant improvements in profitability. The company forecasts a seven-point EBITDA margin expansion to 25%, and it anticipates a robust annualized free cash flow growth of 36% over the next three years, targeting $2.5 billion by 2027. Moreover, Flutter has announced a $5 billion share repurchase program, set to begin later this year and run over the next three years. This represents about 12% of the company's shares at the current market cap, signaling strong confidence in its future prospects.
From a valuation perspective, Flutter Entertainment (FLUT, Financial) is currently trading at $240.17. According to the GF Value metric, the stock is fairly valued with a GF Value of $246.35. The company has shown a significant price change of 12% over the last 24 weeks and a remarkable 46.16% increase over the past 52 weeks, indicating strong upward momentum.
However, investors should also be aware of certain risks associated with Flutter Entertainment (FLUT, Financial). The company has several warning signs, including an Altman Z-score of 2.77, which implies some financial stress, and a history of issuing new debt, with $2.9 billion of debt issued over the past three years. Additionally, Flutter Entertainment (FLUT) has not been profitable over the past three years, consistently reporting operating income losses.
Despite the challenges, Flutter Entertainment (FLUT, Financial) has notable strengths, such as a low Beneish M-Score of -2.9, indicating that the company is unlikely to be a financial manipulator. The stock's price-to-book ratio stands at 4.32, and its price-to-sales ratio is close to a one-year high, reflecting investor confidence in its growth potential.
In conclusion, while Flutter Entertainment (FLUT, Financial) faces some financial challenges, its ambitious growth plans, strong free cash flow projections, and significant share repurchase program make it an interesting stock to watch. Investors should weigh these factors carefully and consider the overall market conditions before making investment decisions.
