Playtika's Debt, Slower Growth Weigh on Outlook as Q2 Seen Matching Estimates, Wedbush Says
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.Price: $4.13, Change: $+0.14, Percent Change: +3.38%
