Triple-digit revenue growth and expansion plans weren’t enough to inspire shareholders on Tuesday
The post Pointsbet (ASX:PBH) share price slumps on FY21 results. What’s next? appeared first on The Motley Fool Australia. –
At the time of writing, Pointsbet shares are changing hands for $10.12 apiece, down 0.88% on the day. They have clawed back some ground after falling as low as $9.85 in early trade.
The sports betting business delivered triple-digit top-line growth but its net losses continued to balloon. Some key highlights for FY21 include:
Betting turnover up 228% to $3,781.4 million;
Active Australian clients up 117% to 196,585;
Active US clients up 661% to 159,321;
Revenue increased by 158% to $194.7 million;
Sales and marketing expense surged 382% to $170.7 million;
Net loss of $164.3 million (FY20: loss of $39.7 million).
Despite trading around 12-month lows of $10.00, Pointsbet is eyeing a number of growth opportunities to capture the emerging US sports betting market and maintain its growth trajectory.
What’s next for Pointsbet and its share price?
Continued momentum in Australia
Pointsbet Australia could be viewed as a solid standalone business, posting a 121% increase in net revenue and annual earnings before interest, taxes, depreciation, and amortisation (EBITDA) of $9.2 million.
Pointsbet managing director and group CEO Sam Swanell described the result as one that “demonstrates Pointsbet’s capability to disrupt and grow market share in an advanced market where we compete successfully against global groups such as Flutter, Entertainment, and Bet365.”
Overall, Pointsbet aims to grow online Australian market share to 10% by 2025. However, this positive outlook wasn’t enough to help the Pointsbet share price today.
Capture North American growth opportunity
The United States is a focal point for the company’s growth story. Pointsbet said its goal is to achieve a 10% market share across all the states that it enters.
Pointsbet currently operates in 6 states including Illinois, Michigan, New Jersey, Indiana, Colorado, and Iowa. According to its results, the company holds a market share of between 7.8% and 3.1% across the 6 states.
Looking ahead, Pointsbet cites a strong pipeline of market access and launches in FY22. The company expects to launch in 11 US states and Ontario, Canada by the end of calendar year 2022.
In addition to sports betting, the company is also targeting the US iGaming market, following its inaugural launch in Michigan.
Between 5 May to 30 June, Michigan’s iGaming segment delivered a net win of A$1.5 million.
After successful launches in Michigan and New Jersey, Pointsbet is targeting launches in West Virginia, Pennsylvania, and Ontario, Canada in FY22.
Pointsbet share price snapshot
The Pointsbet share price is back to where it was a year ago, when the company announced a transformational marketing deal with NBCUniversal.
From a year-to-date perspective, the company’s shares are down about 12%.
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Motley Fool contributor Kerry Sun has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Pointsbet Holdings Ltd. The Motley Fool Australia has recommended Pointsbet Holdings Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.