SciPlay Shares Jump 6.8% on Better-Than-Expected Q2 Results

SciPlay Corporation (SCPL), a developer and publisher of digital games on mobile and web platforms, delivered strong quarterly results backed by sequential top- and bottom-line growth. Shares jumped 6.9% following the results and closed at $17.31 on August 9. (See SciPlay stock charts on TipRanks)

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The company reported earnings of $0.24 per share, down 11.1% compared to the prior-year period, and marginally surpassed the Street’s estimate of $0.23 per share.

Additionally, revenue for the quarter came in at $154 million, down 7% year-over-year, and beat analysts’ estimates of $152.86 million.

Revenue was higher in the year-ago quarter due to the heightened COVID-19-related stay-at-home measures in 2020, which propelled online gaming more than ever.

SciPlay CEO Josh Wilson attributed its strong performance to the core social casino business segment, which hit record-high revenue for Gold Fish, as well as improved key payer metrics.

Commenting on the results, Wilson said, “We continue to evolve our business, rapidly expanding in the casual genre with Solitaire Pets Adventure and the acquisition of Koukoi Games. Koukoi will jumpstart our development of Project X with an experienced and proven team. SciPlay is extremely well situated to continue driving sustainable growth.”

The company’s Average Monthly Revenue Per Paying User (AMRPPU) and Average Revenue Per Daily Active User (ARPDAU) both hit record-high levels of $96.29 and $0.72, respectively.

Moreover, SciPlay’s payer conversion rate also hit an all-time high of 8.5%, and mobile penetration grew 100 basis points year-over-year to 88%.

Last month, Wedbush analyst Michael Pachter downgraded the stock to a Hold rating from Buy and lowered the price target to $17 (1.8% downside potential) from $25.

The revision came in response to the proposed acquisition of SciPlay by its parent company Scientific Games Corporation (SGMS). SGMS intends to buy the remaining 19% stake in SCPL, which it does not currently own in an all-stock transaction, making it a wholly-owned subsidiary of Scientific Games.

Based on 1 Buy and 6 Holds, SCPL stock has an overall Hold consensus rating. The average SciPlay price target of $18.33 implies 5.9% upside potential to current levels. Shares have gained 21.6% over the past year.