Is it a good time to invest in Paddy Power Betfair PLC?

20. april 2018
Paddy Power Betfair

Today we are going to take a look at one of the London Stock Exchange listed companies within the iGaming sector – Paddy Power Betfair PLC (LON: PPB). Before we begin analysing the stock price, let us quickly uncover some facts about the company. It is headquartered Dublin, Ireland and is a part of the FTSE100 Index. The company operates numerous sports betting brands, including Paddy Power, Timeform, Betfair, TVG Network, Sportsbet, and it has recently acquired a fantasy betting company called Draft.

While the key brands (Paddy Power and Betfair) have quite a long history, the merge into Paddy Power Betfair PLC has only happened in late September 2015. Hence, this is quite an immature stock to analyse.

Paddy Power Betfair Chart

Today the company’s stock is trading at around 7,340 GBX per share. Historically, the company has been valued the most on February 26th, 2016, with its share price hitting 10,770 GBX a piece.

Since then, the company’s share price has been declining, but quite slowly. The year 2018 hasn’t started well for Paddy Power Betfair too, as only this year the price slided from 8,870 GBX to 7,120 GBX.

During March 2018 the company’s ratings have been amended by a larger part of the rating agencies, and hence the price of a stock went down. Still, most of these agencies have set an expected mark at 7,500 GBP, which few percent below the current price.

What are the predictions?

When we observe the price volatility, it does seem like the general volatility trend is shrinking:

  • 12 M volatility – 25.026
  • 6 M volatility – 22.86
  • 3 M volatility – 20.74

This tells us that the investors are not really changing their mind, hence are not getting rid of their positions. As a result, we can forecast that a lower volatility contributes to a slow decrease in the company’s price.

When looking at the recent news, we can clearly observe that Paddy Power Betfair PLC is doing quite good in terms of new business opportunities. Just a few days ago the company announced the continuation of its partnership with GAN. As a result, Paddy Power Betfair will establish its online casino in the state of New Jersey, one of the only allowed gambling spots in the US. This can certainly be a positive factor when predicting the growth of the share price.

Last but not least, the company has recently appointed a new CFO. This change will certainly have a great impact on the company’s share price, yet its effect is still to be seen.