Inspired Entertainment (NASDAQ: INSE) shares jumped nearly 11.6% on March 11, despite the gaming technology company’s mixed fourth-quarter results.
Revenues exceeded estimates, driven by robust demand and momentum in all business segments, and a strong recovery in the Gaming and Leisure segments, following the reopening of retail outlets following the pandemic situation. However, earnings fell short of analysts’ expectations.
Inspired Entertainment offers virtual sports, mobile games and server-based gaming systems with associated terminals, digital content, regulated betting, gaming and lottery operators worldwide. Markedly, shares are up 33.1% over the past year.
Mixed performance in the fourth quarter
During the fourth quarter, adjusted revenue totaled $67 million, up 71% year-over-year. It easily exceeded the average forecast of $61.67 million, reflecting continued momentum and robust demand across all business segments. In particular, recreation revenue rose 183% to $23.5 million, acting as a tailwind.
Despite strong earnings numbers, the company posted a loss of $0.05 per share, well below analysts’ expectations for earnings of $0.05 per share. Moreover, it was much worse than the previous year’s earnings of $0.12 per share.
Looking to the year ahead, inspired Chairman Lorne Weil said, “The steady momentum we’ve seen building throughout 2021 and the strong demand that continues to exist for our products in each of our business segments, including industry outlook for land applications. games emerging from COVID-19 and enduring online growth trends, further bolster our confidence in the company’s long-term prospects.
The stock has had an analyst rating for the past three months.
Roth Capital analyst Edward Engel has a buy rating on the stock with a price target of $18 (36.5% upside potential).
TipRanks smart score
INSE scores a 9 out of 10 on TipRanks’ Smart Score rating system, indicating the stock has strong potential to outperform market expectations.
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