Super Group (SGHC) Ltd (NYSE: SGHC)

Sector: Consumer Cyclical Industry: Gambling CIK: 0001878057
Market Cap 4.77 Bn
P/B 5.44
P/E 18.81
P/S 1.88
ROIC (Qtr) 27.87
Div Yield % 2.43
Rev 1y % (Qtr) 33.13
Total Debt (Qtr) 84.71 Mn
Debt/Equity (Qtr) 0.10
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About

Super Group (SGHC) Ltd, under the stock symbol SGHC, is a prominent global player in the online sports betting and gaming industry. The company, established in March 2021 and headquartered in Guernsey, has built a reputation for providing first-class entertainment to the worldwide online betting and gaming community in a responsible manner. Super Group's business operations span a multitude of subsidiaries incorporated across various jurisdictions worldwide. The company's primary product offerings include Betway, a single-brand premier online sports...

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Investment thesis

Bull case

  • Healthy cash reserves of 543.53M provide 92.40x coverage of short-term debt 5.88M, demonstrating strong liquidity position and minimal refinancing risk.
  • Strong tangible asset base of 1.11B provides 13.15x coverage of total debt 84.71M, indicating robust asset backing and low credit risk.
  • Cash position of 543.53M provides exceptional 294.46x coverage of minority interest expenses 1.85M, indicating strong liquidity.
  • Retained earnings of 456.47M provide full 5.79x coverage of long-term debt 78.82M, indicating strong internal capital position.
  • Robust tangible asset base of 1.11B provides 3.32x coverage of working capital 335.29M, indicating strong operational backing.

Bear case

  • Operating cash flow of 0 provides minimal 0x coverage of tax expenses of 165.60M, suggesting potential tax planning inefficiencies or unsustainable tax positions.
  • Operating cash flow of 0 barely covers operating expenses of 149.23M with a 0 ratio, suggesting thin operational efficiency margins and limited flexibility.
  • R&D investment of 0 represents just 0x of SG&A expenses of 209.32M, indicating potential underinvestment in innovation relative to administrative overhead.
  • Other current assets of 12.94M provide weak coverage of payables of 295.29M, which is 0.04x, suggesting potential working capital stress in near term.
  • Operating cash flow of 0 shows concerning coverage of minority interest expenses of 1.85M, which is 0x, suggesting complex corporate structure risks.

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 3.93 1.38
EV to Cash from Ops. EV/CFO 14.48 9.12
EV to Debt EV to Debt 65.04 10.53
EV to EBIT EV/EBIT 12.92 41.15
EV to EBITDA EV/EBITDA 22.54 12.35
EV to Free Cash Flow [EV/FCF] EV/FCF 15.03 20.81
EV to Market Cap EV to Market Cap 1.16 -0.89
EV to Revenue EV/Rev 2.18 1.79
Price to Book Value [P/B] P/B 5.44 2.35
Price to Earnings [P/E] P/E 18.81 170.35
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 0.72
Dividend Payout Ratio % Div Payout % (Qtr) 45.70 20.21
Dividend per Basic Share Div per Share (Qtr) 0.23 0.30
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 45.34
Interest Coverage Int. cover (Qtr) 57.01 -4.66
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 0.00 -6.60
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 46.23 43.20
Dividend Growth (1y) % Div 1y % (Qtr) 130.00 34.14
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 2,134.77 339.71
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 0.00 59.74
EBIT Growth (1y) % EBIT 1y % (Qtr) 515.77 40.42
EBT Growth (1y) % EBT 1y % (Qtr) 568.76 9.08
EPS Growth (1y) % EPS 1y % (Qtr) 2,417.65 463.23
FCF Growth (1y) % FCF 1y % (Qtr) 0.00 -118.03
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 102.78 16.12
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 2.12 1.01
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.08
Cash Ratio Cash Ratio (Qtr) 1.22 0.74
Current Ratio Curr Ratio (Qtr) 1.75 1.04
Debt to Equity Ratio Debt/Equity (Qtr) 0.10 -2.16
Interest Cover Ratio Int Coverage (Qtr) 57.01 -4.66
Times Interest Earned Times Interest Earned (Qtr) 57.01 -4.66
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 0.00 -104.37
EBIT Margin % EBIT Margin % (Qtr) 14.31 -142.35
EBT Margin % EBT Margin % (Qtr) 16.54 -146.31
Gross Margin % Gross Margin % (Qtr) 30.60 44.07
Net Profit Margin % Net Margin % (Qtr) 10.00 -145.36