Is DoubleDown Interactive a purchase proper now?

DoubleDown Interactive (DoubleDown Interactive Inventory Quote, Chart, Information, Analysts, Financials NYSE:DDI) stays compelling in accordance with Roth analyst Eric Handler, who reiterated his “Purchase” score and $16.00 worth goal.

Handler famous in his Feb. 12 report that the shares are buying and selling beneath rising money worth, with web money of $455-million, or $9.19 per share, at year-end 2025. At a current worth of $8.45, the inventory is buying and selling at an 8% low cost to money per share and at a unfavorable enterprise worth.

“DoubleDown stays a gorgeous particular state of affairs with its shares buying and selling beneath its rising money worth,” Handler mentioned, pointing to steady EBITDA, robust free money move era and potential capital returns as key worth drivers. His $16.00 goal implies roughly 3x his 2026 Adjusted EBITDA estimate.

Fourth-quarter outcomes had been blended. Income of $96-million, up 17% year-over-year, missed each Handler’s $104-million estimate and the $99-million consensus forecast. Adjusted EBITDA of $41-million, up 16%, topped his $40-million estimate and the $38-million consensus. Adjusted EBITDA margin slipped 40 foundation factors to 42.4% however exceeded his 38.3% forecast, supported by a 290-basis-point enchancment in gross margin to 73.0%.

Core Social On line casino income declined year-over-year, with Handler estimating the DoubleDown On line casino section at roughly $68-million, excluding roughly $12-million from the lately acquired WHOW Video games. iGaming income of $16-million additionally got here in beneath his $18-million forecast, seemingly reflecting slower person acquisition spending.

For 2026, Handler lowered his income forecast to $371.9-million, up 3% year-over-year from $377-million beforehand, whereas elevating his Adjusted EBITDA estimate to $142.6-million, basically flat year-over-year, from $141-million, implying a 38.3% margin, up from 37.5%. He expects roughly $135-million in working money move, or about $2.70 per share, representing a 94% conversion of Adjusted EBITDA. For 2027, he fashions Adjusted EBITDA of $142.9-million on income of $370.9-million.

Handler mentioned the corporate’s increasing direct-to-consumer (DTC) combine, which surpassed 30% of Social On line casino income within the quarter, is supporting gross margin growth. Administration believes additional DTC positive aspects are achievable in 2026.

Whereas iGaming development presents an offset to a mature social on line casino market that Handler expects to say no at a mid-single-digit fee, he cautioned {that a} new UK distant gaming tax regime, elevating the web on line casino revenue tax fee to 40% from 21% efficient April 1, may stress margins at SuprNation, notably within the close to time period.

Nonetheless, with almost half of whole property in money and projected free money move persevering with to construct the stability sheet, Handler believes the potential for accelerated capital returns may unlock significant worth for shareholders.

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