Wow, experiencing significant buyers remorse with this one.
1) Revenue up about 126%
2) Expenses up 266%! Ok, there has been significant investments in USA.
3) Churn. Registered clients grew by 122K over pcp, yet this converted to just 56K active clients. Churn looks very high, and this is a real concern, as marketing costs are $168 per registered client.
I don't like the high churn rate, and PBH is up against Draft kings and Fan Duel. Tough competition with deep pockets. PBH may suceed, but given they are not the top dog, the probability of this is below 50% IMHO.
Livewire Markets's 'Buy, Hold, Sell' video - Two fundies rate PBH a 'HOLD' and 'SELL' due to:
PointsBet and NBA Announce Multiyear Sports Betting Partnership
They may be burning cash at an alarming pace but are currently still delivering on the growth story.
Another US deal in this space. The Wall Street Journal reports, 11/2/20, this deal has the following objective. "The logic of the deals is simple: Sports books, which suddenly have an opportu-nity to reach customers across the U.S., are relying on media companies to deliver potential bettors. Media companies, meanwhile, are selling access to their audi-ences and seeking sponsor-ships for new content aimed at gambling enthusiasts."
"Sports-betting operator William Hill US and ViacomCBS Inc.’s CBS Sports have agreed to a deal that would enable the gambling company to seek new cus-tomers among the media giant’s audience, the compa-nies said Monday. William Hill agreed to pay CBS Sports a fee for access to its audience and sponsorships across CBS Sports content, according to people familiar with the matter. The deal, which includes incentives for hitting certain targets, is aimed at getting CBS Sports users to download the William Hill betting app and put money into their betting accounts, the people said."
PBH is facing the significant competition across the US landscape. While it's app is unique (I am a New Jersey resident and have used it several times throughout the college football season) if people are being driven to other solutions, it will be hard for them to thrive here in the US market. CBS shows major sports events on a national basis. Lots of Eyeballs.
As someone who's lived in North America most of my adult life and is a huge sports fan and even bigger fantasy sports fan I think PBH is really overhyped/misunderstood by a lot of Aussies.
They're not first movers and from what I can tell don't have a competitive advantage. In fact I'd argue their competitors have the advantage of already having a large client base already playing fantasy sports on their sites. Customer acquisition cost will be minimal for their competitors (fanduel etc).
I haven't delved into them extensively but for this reason I'm very bearish on them.
Even if not established as #1 provider over Draft Kings, the addressable market is insane. Hoping management leverage their international experience and grow fast in the States.