Thread by @puppyeh1

GAN PLC (LSE: GAN) is breaking out to new highs daily, and I think the stock has a lot more to go. Here's why...

THREAD 1/

(disclosure: long )

GAN provides enterprise software to land-based casinos to enable online gambling in the US. Online gambling - largely driven by legalization of sports betting - is exploding in the states where it is legal. Check this:

legalsportsreport.com/35725/nj-sport…

2/

GAN is the provider to the two largest players in sports betting in NJ and PA, today (Fanduel, Parx Casino), and thus is a direct beneficiary of the secular growth ongoing.

GAN reported 145% net rev growth in 1H'19 and KPIs have continued to accelerate in 3Q...

3/

In 3Q KPIs continued to print insane growth (ARPDAU +90% yoy, player days +60% yoy, operator revenue +200% yoy) and the co was ALREADY EBITDA profitable in 1H. This is a SaaS type platform business so incremental rev growth should be highly profitable

4/

In other words profitability should theoretically scale very quickly as incremental platform revenue (more gamblers on GAN-supported sites) simply drops through to the operator (GAN gets a % of operator revenue) w/ minimal cost...

5/

GAN is London-listed but most all revs are generated in the US. It is also a microcap listed on the junior exchange. This is why it still trades at - imho - discounted valns of 3x EV/revs and say 12x EV/EBITDA - despite top-line growth >100% this yr (and maybe next)

6/

So, GAN is pursuing a relisting on NASDAQ, which should be completed in 6mos, maybe in <3mos.

What do SaaS businesses with multi-yr tailwinds and >50% rev growth trade at on NASDAQ? I couldn't find any under 5-6x EV/revs...implying at least a clean double on relisting alone

7/

Mgmt is aligned w/ CEO (Dermot Smurfit, of Smurfit Kappa family) and family owning c.30% of the business. Despite the large rally, they have sold almost none of their stake on the way up...

8/

This is a micro-cap (75mm GBP EV, $90mm USD) so caveat emptor but this could easily be a two- or three-bagger on the NDAQ relisting and reporting of killer 2H'19 earnings alone. All in next 4-5mos imho.

9/END

Discl: long , DYODD