This stock is benefiting from the gambling passion of the Americans.

Last Updated: 19. Februar 2024By

The hype surrounding the Super Bowl in the USA is already a bit crazy. It also becomes clear that Americans are always up for a wild bet. This year, the Taylor Swift Super Bowl bets were particularly interesting.

The blonde pop icon is dating Kansas City Chief star Travis Kelce and surely bet on her lover’s team, which also won. However, betting on the victory or defeat of a specific team sounds almost boring when you can also bet on how many times Taylor Swift will be shown during the national anthem, whether she will be seen eating a hot dog on television, or if she will receive a marriage proposal after the game.

Americans simply love to gamble. Therefore, as an investor, the stock of Aristocrat (WKN: 901652) could also be interesting for you.

Aristocrat Leisure Ltd. Source: Stock Screener Investor Verlag Aristocrat from Australia: Number 1 in the USA Aristocrat from Australia is a leading manufacturer of gambling machines worldwide. In the USA, Aristocrat is number one with 64,000 machines. The company produces two types of slot machines. On the one hand, classic slot machines where players have to hope for the right combination of numbers and symbols, and on the other hand, machines that simulate entire poker games.

The business is lucrative, among other things, due to recurring revenues. Aristocrat collects both leasing fees from casinos and fees for daily operations. On average, Aristocrat earns $55 per day per machine. In total, revenue in September of the past fiscal year 2023 was $4 billion, an increase of around 13% compared to the fiscal year 2022.

Like other betting providers, Aristocrat also benefits from the increasing legalization of gambling in the USA and the gambling passion of Americans.

Slot machines and digital casino platforms The slot machine business accounts for around 58% of Aristocrat’s revenue. The rest is generated from mobile games and its own online casino. In addition, a new B2B business is planned. Aristocrat wants to build and sell digital casino platforms. Casinos only have to add their logo – done. For this new business, the competitor Neo Games is planned to be bought for $1.2 billion.

Expansion through acquisitions The planned acquisition is not an isolated case. In early 2022, Aristocrat wanted to spend more than $2 billion on the British betting software provider Playtech, and in 2014 and 2017, one billion was paid for mobile gaming companies.

Investors should expect further large acquisitions, which may not initially be received well by the stock market. The market value of Aristocrat is $18 billion, which is about $5 billion below its all-time high.

For investors, it is interesting that a share buyback program of $1.5 billion is planned for this year. Due to its strong market position and promising future prospects, the valuation of 20 times earnings is not too expensive. The company is definitely worth a look, even though there may be some debt on the balance sheet due to the acquisitions.

You decide if the stock would be a good addition to your portfolio or not.

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