Company Overview
Codere Online Luxembourg, S.A. operates as an online casino gaming and sports betting entity with a geographic footprint that includes Spain, Mexico, Colombia, Panama, Argentina, and international markets. The company provides online casino games to land-based casinos, gaming halls, and other gambling establishments, serving a consumer cyclical sector within the broader gambling industry. This industry classification implies that the company's financial performance is directly correlated with discretionary consumer spending and economic cycles that influence gambling activity. The organization employs a workforce of 325 individuals and maintains a market capitalization of $390.41M, indicating its valuation relative to the total stock market. With annual revenue reaching $203.93M, the revenue figures suggest a substantial operational scale, positioning the company as a significant player within its specific niche of digital gaming and betting services.
Financial Health
The company reported revenue of $203.93M over the trailing twelve months, accompanied by a net income of $1.01M and an EBITDA of $5.84M. The significant gap between the total revenue of $203.93M and the net income of $1.01M reveals a cost structure where operating expenses and taxes consume the vast majority of gross earnings before reaching the bottom line. The business generates a free cash flow of $10.62M, which provides the company with substantial financial flexibility to manage liquidity needs or fund operational requirements without relying heavily on external financing. Analysis of the three key margins shows a gross margin of 91.2%, an operating margin of 2.9%, and a profit margin of 0.5%. The high gross margin of 91.2% indicates strong pricing power or low cost of goods sold, while the operating margin of 2.9% and profit margin of 0.5% suggest that overhead costs and non-operating expenses are substantial relative to sales. On the balance sheet, the company holds $45.12M in cash against total debt of $3.70M, resulting in a conservative debt-to-equity ratio of 17.98% that indicates a highly leveraged-free capital structure. The current ratio stands at 1.40, which indicates that the company holds sufficient current assets to cover its short-term liabilities with a comfortable safety margin. Return on equity is 5.1% and return on assets is 5.0%, metrics that reveal how effectively management is deploying shareholder capital and company assets to generate profit, though the returns are moderate relative to the high valuation multiples.
Valuation Assessment
The trailing twelve-month P/E ratio is 428.50, while the forward P/E ratio is 19.00, implying that the market expects a dramatic expansion in earnings to bring the valuation down to more traditional levels. The price-to-book ratio is 16.47, which indicates that the stock trades at a significant premium over its book value, suggesting investors are pricing in future growth potential or intangible assets rather than current asset backing. Alternative valuation metrics show a price-to-sales ratio of 1.91 and an EV/EBITDA of 59.82, suggesting that the market is willing to pay a high multiple for revenue and earnings based on enterprise value expectations. The 52-week trading range spans from a low of $5.18 to a high of $8.77, and the current price sits below the 52-week high of $8.77 but above the 52-week low of $5.18, reflecting recent volatility within the observed trading window. The beta value is 0.44, which means the stock exhibits lower price volatility relative to the broader market, potentially offering a less risky profile for investors concerned with systemic market swings.
Growth & Income
Revenue growth year over year is 3.2%, while earnings growth is N/A, indicating that the company is currently prioritizing revenue expansion over immediate profit scaling or that earnings data is not consistently tracked in the same manner as revenue. Since earnings growth is listed as N/A, it is not possible to determine if earnings are growing faster or slower than revenue, but the revenue growth of 3.2% suggests a steady, albeit modest, increase in top-line activity. As a non-dividend payer, the company reinvests its earnings into growth initiatives rather than distributing cash to shareholders, evidenced by a dividend yield of N/A and a payout ratio of 0.0%. The overall growth and income profile presents a scenario of reinvestment-focused expansion where capital is retained to fuel the online casino and sports betting operations rather than providing current income through dividends.