Benchmark maintains Buy on SGHC stock with $12 target post Q1 results

Investing.com

Published May 13, 2025 10:19AM ET

Benchmark maintains Buy on SGHC stock with $12 target post Q1 results

On Tuesday, Benchmark analysts maintained their Buy rating and a $12.00 price target for SGHC Limited (NYSE: SGHC), following the company's robust first-quarter financial performance in 2025. With revenue growth of 31.3% and a market capitalization of $4.36 billion, Super Group's success in surpassing consensus estimates for both revenue and adjusted EBITDA reflects its strong momentum. The analysts praised the company for its operational efficiency and solid execution within its diverse international portfolio, noting its impressive 164% return over the past year.

Super Group's non-U.S. operations were noted for their significant contribution to the company's profitability, with a healthy gross profit margin of 50.4%. In addition, the firm's U.S. iGaming business demonstrated sequential improvement, particularly after the rebranding of Spin Palace. Management's commentary during the earnings call accentuated the company's high-margin growth in Africa, increased market share in the U.K. and Canada, and positive developments in newly entered markets such as Botswana. According to InvestingPro , the company maintains strong financial health with more cash than debt on its balance sheet, one of several positive indicators available in the platform's comprehensive analysis.

The analysts underscored Super Group's financial health, pointing out its clean balance sheet and active approach to capital returns. The company's strong trading performance in April across different regions was also mentioned as an indicator of its promising position as it enters the second quarter of 2025.

Benchmark's report reflects confidence in Super Group's strategic direction and its ability to maintain a growth trajectory. The firm's diversified portfolio and expansion into new markets, coupled with effective capital management, were key factors contributing to the positive outlook for the company's stock.

In other recent news, SGHC Limited announced strong fourth-quarter results, reporting a 58% year-over-year increase in revenue outside the U.S. to €487 million and a 152% surge in adjusted EBITDA to €129 million. The company also maintained a robust cash position with €356 million and no debt, while setting a revenue target exceeding €1.9 billion for 2025. In response to these impressive earnings, Canaccord Genuity raised its price target for SGHC from $10.00 to $11.00, highlighting the company's record performance and growth in key regions such as Africa. Benchmark analysts also increased their price target to $12.00, citing SGHC's financial success and strategic shift towards an iGaming-only model in the U.S. market. BTIG initiated coverage with a Buy rating and a $9.00 price target, acknowledging SGHC's strong presence across multiple continents and its ability to navigate regulatory challenges. Analysts from Benchmark and Canaccord expressed confidence in SGHC's growth potential, with expectations of double-digit revenue and AEBITDA increases for 2025. These developments underscore SGHC's strategic focus and market leadership, positioning the company for continued growth.

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