Brightstar Lottery PLC (NYSE: BRSL)

Sector: Consumer Cyclical Industry: Gambling CIK: 0001619762
Market Cap 2.79 Bn
P/B 0.77
P/E -19.68
P/S 0.50
ROIC (Qtr) 5.72
Div Yield % 6.11
Rev 1y % (Qtr) 7.16
Total Debt (Qtr) 5.13 Bn
Debt/Equity (Qtr) 3.79
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About

International Game Technology PLC (IGT), a global leader in gaming, is a publicly-traded company listed on the New York Stock Exchange under the symbol IGT. The company delivers entertaining and responsible gaming experiences for players across all channels and regulated segments. IGT's business is organized into three segments: Global Lottery, Global Gaming, and PlayDigital, providing an integrated portfolio of innovative gaming technology products and services, including online and instant lottery systems, iLottery, instant ticket printing, lottery...

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Investment thesis

Bull case

  • Healthy cash reserves of 1.70B provide 14.50x coverage of short-term debt 117M, demonstrating strong liquidity position and minimal refinancing risk.
  • Operating cash flow of 394M provides strong 17.91x coverage of stock compensation 22M, indicating sustainable incentive practices.
  • Cash position of 1.70B provides exceptional 11.78x coverage of minority interest expenses 144M, indicating strong liquidity.
  • Tangible assets of 6.48B provide robust 12.60x coverage of other current liabilities 514M, indicating strong asset backing.
  • Operating cash flow of 394M provides strong 3.43x coverage of inventory 115M, indicating efficient inventory management.

Bear case

  • Operating cash flow of 394M barely covers its investment activities of 3.54B, with a coverage ratio of 0.11, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating cash flow of 394M provides thin coverage of dividend payments of (768M) with a -0.51 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • High receivables of 514M relative to inventory of 115M (4.47 ratio) suggests aggressive credit terms or collection difficulties, potentially masking revenue quality issues.
  • Free cash flow of 110M provides weak coverage of capital expenditures of 284M, with a 0.39 ratio suggesting additional external financing needs for growth initiatives.
  • Operating cash flow of 394M provides minimal 1.74x coverage of tax expenses of 227M, suggesting potential tax planning inefficiencies or unsustainable tax positions.

Product and Service Breakdown of Revenue (2024)

Geographical Breakdown of Revenue (2024)

Peer comparison

Companies in the Gambling
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 FLUT Flutter Entertainment plc 29.14 Bn -96.80 1.89 12.68 Bn
2 DKNG DraftKings Inc. 8.38 Bn 2,259.00 1.38 1.89 Bn
3 CHDN Churchill Downs Inc 6.54 Bn 15.85 2.45 5.11 Bn
4 SGHC Super Group (SGHC) Ltd 4.77 Bn 18.81 1.88 0.08 Bn
5 BRSL Brightstar Lottery PLC 2.79 Bn -19.68 0.50 5.13 Bn
6 RSI Rush Street Interactive, Inc. 1.54 Bn 51.33 1.45 0.00 Bn
7 ACEL Accel Entertainment, Inc. 0.92 Bn 21.02 0.70 0.60 Bn
8 CDRO Codere Online Luxembourg, S.A. 0.30 Bn 251.54 1.25 -

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 1.19 1.38
EV to Cash from Ops. EV/CFO 10.94 9.12
EV to Debt EV to Debt 2.16 10.53
EV to EBIT EV/EBIT 25.69 41.15
EV to EBITDA EV/EBITDA 6.88 12.35
EV to Free Cash Flow [EV/FCF] EV/FCF 12.89 20.81
EV to Market Cap EV to Market Cap 3.97 -0.89
EV to Revenue EV/Rev 1.97 1.79
Price to Book Value [P/B] P/B 0.77 2.35
Price to Earnings [P/E] P/E -19.68 170.35
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 0.40 0.72
Dividend Payout Ratio % Div Payout % (Qtr) 250.00 20.21
Dividend per Basic Share Div per Share (Qtr) 3.80 0.30
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 673.76 45.34
Interest Coverage Int. cover (Qtr) 4.00 -4.66
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -91.89 -6.60
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 181.26 43.20
Dividend Growth (1y) % Div 1y % (Qtr) 375.00 34.14
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 92.55 339.71
EBITDA Growth (1y) % EBITDA 1y % (Qtr) -5.94 59.74
EBIT Growth (1y) % EBIT 1y % (Qtr) 38.82 40.42
EBT Growth (1y) % EBT 1y % (Qtr) 78.19 9.08
EPS Growth (1y) % EPS 1y % (Qtr) 145.16 463.23
FCF Growth (1y) % FCF 1y % (Qtr) -88.71 -118.03
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) -7.93 16.12
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.27 1.01
Cash Payout Ratio Cash Payout (Qtr) 1.13 0.08
Cash Ratio Cash Ratio (Qtr) 0.50 0.74
Current Ratio Curr Ratio (Qtr) 0.74 1.04
Debt to Equity Ratio Debt/Equity (Qtr) 3.79 -2.16
Interest Cover Ratio Int Coverage (Qtr) 4.00 -4.66
Times Interest Earned Times Interest Earned (Qtr) 4.00 -4.66
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 37.00 -104.37
EBIT Margin % EBIT Margin % (Qtr) 28.39 -142.35
EBT Margin % EBT Margin % (Qtr) 21.29 -146.31
Gross Margin % Gross Margin % (Qtr) 45.60 44.07
Net Profit Margin % Net Margin % (Qtr) 12.20 -145.36