Playtika Holding (PLTK) is expected to post Q2 results that broadly match consensus, with margin improvement offset by softer direct-to-consumer traffic, slower portfolio momentum and a heavy debt load that weighs on the longer-term outlook for the mobile-game maker, Wedbush Securities said Monday in a report.
Wedbush projects Q2 revenue of $707.5 million, and its Q3 revenue forecast of $672.1 million trails the consensus by 1.5%.
Disney Solitaire continues to improve, though older titles are losing momentum and growth is increasingly concentrated in fewer products, Wedbush said. A 7.3% quarterly drop in webstore visits may point to weaker direct-to-consumer trends, which had recently helped counter declining revenue from third-party platforms, the report said.
Playtika's net debt is expected to rise to $1.96 billion after an earnout payment, making refinancing a potential near-term positive catalyst for the shares, Wedbush said.
Wedbush raised its price target on Playtika's stock to $4 from $3 and maintained its neutral rating. Q2 results are due Thursday.
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