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Doubledown Interactive Co (DDI)
NASDAQ:DDI
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Doubledown Interactive Co
(NASDAQ:DDI)
72Outperform
Positive Factors
Acquisition Synergy
The company is generating additional top-line growth from the synergistic acquisition of SuprNation with its European-based real-money gaming platform.
Business Model
DoubleDown operates a very profitable capital-light business, with robust profitability and FCF generation supported by high player retention.
Monetization
The company's ability to monetize its base, converting nearly 7% of its active users into active payers, is impressive, tracking at over 3x the industry average.
Negative Factors
Market Valuation
DDI shares trade at what is viewed as an excessively pessimistic <1x 2025E EV/EBITDA compared with social casino gaming peers at 5x.
Topline Performance
Topline missed expectations on declining user metrics, but EBITDA beat.
User Metrics
Management optimized gross margin and marketing expenditures to balance against declining user metrics, achieving profitability expectations.
Doubledown Interactive Co (DDI) vs. S&P 500 (SPY)
Market Cap
$491.57M
Dividend YieldN/A
Average Volume (3M)26.86K
Price to Earnings (P/E)4.0
Beta (1Y)0.73
Revenue Growth10.32%
EPS Growth20.82%
CountryUS
Employees281
SectorCommunication Services
Sector Strength74
IndustryElectronic Gaming & Multimedia
Share Statistics
EPS (TTM)2.50
Shares Outstanding49,553,440
10 Day Avg. Volume20,091
30 Day Avg. Volume26,858
Financial Highlights & Ratios
PEG Ratio0.18
Price to Book (P/B)N/A
Price to Sales (P/S)5.99
Price to Cash Flow (P/CF)N/A
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$20.67Price Target Upside106.70% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering3
Doubledown Interactive Co Business Overview & Revenue Model
Company DescriptionDoubledown Interactive Co (DDI) is a leading developer and publisher of digital games, primarily focusing on the social casino gaming sector. The company is known for its flagship product, DoubleDown Casino, which provides players with a virtual casino experience featuring a variety of slot machines, poker, and other classic casino games. DDI operates primarily in the mobile gaming and social media platforms, offering users engaging and interactive gaming experiences.
How the Company Makes MoneyDoubledown Interactive Co generates revenue primarily through the sale of virtual currency within its games. Players purchase these in-game currencies to enhance their gaming experience, allowing them to play longer or access special features. The company's freemium model attracts a wide user base who can play for free but are incentivized to make in-app purchases for additional benefits. Key revenue streams include microtransactions, in-game advertisements, and partnerships with social media and mobile platforms to reach a broader audience. Additionally, the company may benefit from collaborations with other gaming developers and platforms to expand its market presence and introduce new games.
Doubledown Interactive Co Financial Statement Overview
Summary
Doubledown Interactive Co demonstrates strong financial performance across all verticals. The company has successfully increased profitability and maintains a solid balance sheet with low leverage. Cash flow management is a notable strength, ensuring financial resilience and flexibility. While past revenue fluctuations pose a potential risk, the overall financial health is commendable.Income Statement
Doubledown Interactive Co shows strong profitability with a consistent increase in net income and EBIT margins over recent years. The 2024 figures highlight a gross profit margin of 69.7% and a net profit margin of 36.3%, both indicating robust profitability. The revenue growth rate from 2023 to 2024 was 10.5%, showcasing a healthy upward trend. However, past fluctuations in revenue and profit margins indicate some degree of volatility.85
Very Positive
Balance Sheet
The company maintains a solid balance sheet with a low debt-to-equity ratio of 0.05 in 2024, reflecting conservative leverage. The equity ratio stands strong at 92.9%, indicating a high level of financial stability. However, the company has shown a decrease in total assets over time, which could signal potential risks if this trend continues.78
Positive
Cash Flow
The cash flow statement reveals impressive improvements, with a remarkable free cash flow growth rate of 416.9% from 2023 to 2024. The operating cash flow to net income ratio of 1.20 suggests efficient cash generation from operations. Free cash flow consistently exceeds net income, highlighting strong cash flow management. These factors contribute to a robust cash position, enhancing financial flexibility.88
Very Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 341.33M | 308.86M | 321.03M | 363.20M | 358.34M | Gross Profit |
| 237.79M | 282.93M | 211.72M | 236.59M | 232.09M | EBIT |
| 137.01M | 124.34M | 102.64M | 98.73M | 88.78M | EBITDA |
| 141.87M | 136.72M | -263.64M | 120.54M | 117.58M | Net Income Common Stockholders |
| 124.02M | 100.89M | -233.98M | 78.11M | 53.62M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 414.85M | 274.99M | 285.24M | 242.06M | 63.19M | Total Assets |
| 906.16M | 803.34M | 792.05M | 969.92M | 806.83M | Total Debt |
| 38.69M | 46.35M | 44.13M | 49.94M | 56.82M | Net Debt |
| -296.16M | -160.56M | -173.22M | -192.12M | -6.37M | Total Liabilities |
| 64.13M | 75.45M | 165.83M | 105.93M | 107.32M | Stockholders Equity |
| 841.91M | 727.73M | 626.23M | 863.99M | 699.51M |
| Cash Flow | Free Cash Flow | |||
| 147.59M | 28.53M | 50.52M | 94.30M | 99.63M | Operating Cash Flow |
| 148.45M | 28.71M | 50.79M | 96.11M | 99.85M | Investing Cash Flow |
| -15.61M | -30.27M | -67.83M | -1.81M | -2.17M | Financing Cash Flow |
| -2.01M | 0.00 | -2.91M | 86.04M | -76.27M |
Doubledown Interactive Co Technical Analysis
Neutral
10.00
Price Trends
10.02
Negative
11.30
Negative
12.31
Negative
Market Momentum
-0.04
Negative
48.75
Neutral
47.87
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DDI, the sentiment is Neutral. The current price of 10 is above the 20-day moving average (MA) of 9.88, below the 50-day MA of 10.02, and below the 200-day MA of 12.31, indicating a neutral trend. The MACD of -0.04 indicates Negative momentum. The RSI at 48.75 is Neutral, neither overbought nor oversold. The STOCH value of 47.87 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for DDI.
Doubledown Interactive Co Risk Analysis
Doubledown Interactive Co disclosed 54 risk factors in its most recent earnings report. Doubledown Interactive Co reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Doubledown Interactive Co Peers Comparison
Overall Rating
UnderperformOutperform
Sector (59)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | $432.15M | 6.85 | 16.74% | ― | -33.07% | -43.07% | |
72 Outperform | $491.57M | 4.00 | 15.08% | ― | 10.32% | 20.82% | |
63 Neutral | $860.74M | 51.97 | 5.08% | ― | 8.33% | 436.49% | |
60 Neutral | $603.79M | 44.54 | 5.15% | ― | 8.80% | -91.33% | |
59 Neutral | $27.83B | 1.88 | -18.16% | 4.00% | 2.13% | -44.45% | |
58 Neutral | $162.83M | ― | -10.76% | ― | -6.90% | -57.81% | |
52 Neutral | $563.39M | ― | -42.46% | ― | -10.12% | 72.31% |
* Communication Services Sector Average
Performance Comparison
DDI
Doubledown Interactive Co
9.73
-0.45
-4.42%
GRVY
Gravity Co
60.13
-13.46
-18.29%
FVRR
Fiverr International
23.44
3.39
16.91%
THRY
Thryv Holdings
12.05
-9.68
-44.55%
SEAT
Vivid Seats
2.76
-2.92
-51.41%
MYPS
PLAYSTUDIOS
1.17
-1.74
-59.79%
Doubledown Interactive Co Earnings Call Summary
Earnings Call Date: Feb 11, 2025 | % Change Since: -7.41% | Next Earnings Date: May 7, 2025
Earnings Call Sentiment Positive
The earnings call highlighted strong financial performance with growth in revenue, profitability, and cash flow, particularly driven by the acquisition and integration of SuperNation. However, challenges in maintaining growth in a declining social casino market and a slight drop in Q4 revenue were noted. Despite these challenges, the company's strategic initiatives and strong monetization metrics provide a positive outlook.Highlights
Revenue Growth and Profitability
Full year 2024 revenue was $341.3 million, a 10% increase from $308.9 million in 2023. Adjusted EBITDA for 2024 was $141.9 million, a 16% increase from 2023.
Strong Cash Flow
The company generated over $148 million in cash flow from operations in 2024, compared to $24.1 million in 2023.
SuperNation Performance
SuperNation's Q4 2024 revenue was $9 million, more than 30% higher than the estimated quarterly run rate prior to acquisition in 2023.
Monetization Improvements
Key monetization metrics improved, including ARPDAU which increased to $1.30 in Q4 2024 from $1.24 in Q4 2023, and payer conversion ratio which rose to 6.9% from 6.4%.
Lowlights
Slight Decline in Q4 Revenue
Q4 2024 revenue was $82 million, slightly down from $83.1 million in Q4 2023.
Social Casino Market Challenges
Industry revenues for social casinos are estimated to have declined in 2024, and further declines are expected in 2025, presenting growth challenges.
Reduced Adjusted EBITDA Margin
Q4 2024 adjusted EBITDA margin was 42.8%, down from 44.5% in Q4 2023.
Company Guidance
During DoubleDown Interactive's earnings call for the fourth quarter and full year ended December 31, 2024, the company provided guidance indicating a slight year-over-year decrease in consolidated revenue to $82 million, with adjusted EBITDA at $35.1 million. The revenue was broken down into $73 million from social casino/free-to-play games and $9 million from SuperNation, their iGaming business. Despite a dip in daily and monthly active users, the company saw strong increases in monetization KPIs, such as ARPDAU, average monthly revenue per payer, and payer conversion rate. For the full year 2024, DoubleDown reported $341.3 million in total revenue, marking a 10% increase from the previous year, largely driven by the acquisition of SuperNation. Adjusted EBITDA reached $141.9 million, a 16% year-over-year rise, with a margin of 41.6%. The company generated over $148 million in cash flow from operations during the year. Looking ahead, DoubleDown plans to continue enhancing player engagement and monetization while exploring opportunities for growth through in-house development and potential M&A activities in adjacent gaming categories.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.