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Stock Analysis & Valuationpferdewetten.de AG (EMH.DE)

Professional Stock Screener
Previous Close
2.74
Sector Valuation Confidence Level
Low
Valuation methodValue, Upside, %
Artificial intelligence (AI)633.2423011
Intrinsic value (DCF)4911.48179151
Graham-Dodd Method0.88-68
Graham Formulan/a

Strategic Investment Analysis

Company Overview

pferdewetten.de AG (EMH.DE) is a Germany-based online horse betting company specializing in wagering on galloping and trotting races across Germany, as well as international horse racing events in England, France, and other regions. Founded in 1997 and headquartered in Düsseldorf, the company operates under the Technology sector within Media & Entertainment. Beyond its core betting services, pferdewetten.de AG provides advisory and training services for sports and horse betting operations, along with technical solutions like web development, payment systems, and video streaming. Formerly known as Sportwetten.de AG, the company has established a niche in the online gambling market, leveraging digital platforms to serve bettors globally. With a market capitalization of approximately €19.75 million, pferdewetten.de AG remains a specialized player in the competitive online betting industry, though recent financials indicate challenges in profitability.

Investment Summary

pferdewetten.de AG presents a high-risk investment opportunity due to its niche focus on online horse betting and recent financial struggles, including a net loss of €1.54 million in FY 2022. The company's revenue of €15.33 million suggests moderate scale, but negative operating cash flow (-€2.12 million) raises liquidity concerns. However, its strong cash position (€11.47 million) and low debt (€761,431) provide some financial flexibility. The stock's beta of 0.716 indicates lower volatility compared to the broader market, which may appeal to risk-averse investors. Given the regulatory risks in the gambling sector and competition from larger sports betting platforms, investors should weigh the company's specialized market position against its profitability challenges.

Competitive Analysis

pferdewetten.de AG competes in the highly fragmented online gambling market, where differentiation is key. Its focus on horse racing provides a niche advantage, catering to a dedicated customer base, but this specialization also limits its addressable market compared to broader sports betting platforms. The company's technical services, including payment systems and web development, add ancillary revenue streams but face stiff competition from dedicated tech providers. Financially, pferdewetten.de AG's modest revenue and recent losses highlight its struggle to scale against larger competitors. Its German and international horse racing coverage is a strength, but the lack of diversification into mainstream sports betting or casino games may hinder growth. The company's low debt and solid cash reserves offer stability, but its negative operating cash flow suggests inefficiencies in cost management. To compete effectively, pferdewetten.de AG must either deepen its niche expertise or expand into adjacent betting verticals while improving operational profitability.

Major Competitors

  • Entain plc (GVC.L): Entain (formerly GVC Holdings) is a global leader in online sports betting and gaming, operating brands like Ladbrokes and Coral. Its diversified portfolio across sports betting, casino, and poker gives it a significant scale advantage over pferdewetten.de AG. However, Entain's broader focus means it lacks pferdewetten.de's specialized horse racing expertise. Regulatory scrutiny and high operational costs are ongoing challenges for Entain.
  • Flutter Entertainment plc (FLTR.L): Flutter Entertainment owns Paddy Power, Betfair, and FanDuel, making it one of the largest online betting companies globally. Its technological edge and massive marketing budget dwarf pferdewetten.de's capabilities. However, Flutter's primary focus on mainstream sports and US expansion means it does not prioritize horse racing as intensely as pferdewetten.de. Flutter's scale allows for better margins but comes with higher regulatory risks.
  • Kinguin S.A. (KOG.DE): Kinguin operates in the digital entertainment space, including e-sports betting, which competes indirectly with traditional sports betting. While not a direct competitor to pferdewetten.de's horse racing focus, Kinguin's younger demographic targeting and e-sports specialization represent a shifting trend in online gambling that could draw customers away from niche players like pferdewetten.de.
  • Tipico Group Ltd. (TIP.SW): Tipico is a major player in the German-speaking betting market, with a strong retail and online presence. Its sports betting dominance in Germany poses a direct threat to pferdewetten.de's customer base. Tipico's broader sports coverage and established brand give it an edge, though it lacks pferdewetten.de's dedicated horse racing platform. Tipico's regulatory compliance in key markets is a strength.
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