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Why GAN Limited Stock Jumped on Thursday

By Demitri Kalogeropoulos - Jul 8, 2021 at 10:53AM

Key Points

  • A growth upgrade has investors feeling more bullish about this online betting business.

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The company just raised its outlook after a strong second quarter.

What happened

Gan Limited (GAN 12.06%) stock jumped in early trading Thursday, rising over 16% an hour after the market opened, according to data provided by S&P Global Market Intelligence.

Investors were celebrating a preliminary second-quarter earnings report that came out after the market closed on Wednesday afternoon.

Hands hold a credit card and a smartphone on a sports betting app.

Image source: Getty Images.

So what

That report showed sales will rise to between $34 million and $35 million this quarter to significantly outpace the $24 million that Wall Street was expecting. The software-as-a-service company, which focuses on the sports betting and online gambling niche, also expects to break even on adjusted earnings.

Management credited strong demand across a few key markets, including Europe and Latin America, for the accelerating growth. "Momentum has carried through the second quarter and driven continued sequential top-line growth for the business," CEO Dermot Smurfit said in a press release.

Now what

The biggest takeaway from the update is that GAN Limited now sees a much stronger sales opportunity ahead. While executives back in May lifted their annual outlook to between $103 million and $108 million, they now expect to book between $125 million and $135 million of revenue in 2021.

That's still a relatively tiny sales footprint for a company valued at over $700 million following the recent stock price surge. But investors have high expectations for GAN Limited as it seeks to diversify into new geographies and build a bigger client list. Reports like this one add fuel to that optimistic growth outlook.

Demitri Kalogeropoulos has no position in any of the stocks mentioned. The Motley Fool recommends GAN Limited. The Motley Fool has a disclosure policy.

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