Kambi Group

Executive Summary & Thesis

Kambi’s turnaround is real — but the re-rate that would have made it a Buy has already happened. After a genuinely strong Q1 2026 (revenue +5%, adjusted EBITDA €14.0m vs €11.8m expected, +18.6%), the stock jumped 21% and has compounded to ~SEK166 — up ~25%+ from its winter levels, near its 52-week high (SEK180), roughly at consensus (~SEK165–177), and above Jefferies’ SEK140 Hold target. We initiate at HOLD, PT SEK170 (~+2%): a high-quality operational recovery that is now fairly priced, with persistent structural risks capping near-term upside.

The bull case is credible: AI-powered pricing/trading (Tzeract) now handles a record ~60% of bets and the FIFA World Cup will be fully AI-traded (high incremental margin); the modular Odds Feed+ product (targeted at 10–15% of 2026 revenue) is a smart adaptation to the industry’s in-housing trend — selling components to Tier-1 operators (LeoVegas, Hard Rock, ComeOn, Coolbet, Superbet) rather than only full turnkey; the Ontario Lottery (OLG) launch drove Q1; FY26 adjusted EBITDA is guided to €20–25m (up from ~€17m); the balance sheet is net cash (~€31–45m) and management is buying back stock.

HOLD · PT SEK170 (~+2%). The operational turn is real and we are not short it — but at ~SEK166 near 52-week highs, on a recovered-but-still-rich multiple, and with the same customer-concentration, in-housing and prediction-market overhangs that have dogged the name, risk/reward is balanced. Own it through the turnaround thesis only if you underwrite the modular/AI re-rate continuing; otherwise wait for a pullback or a clean beat-and-raise.

Business Model & Competitive Forces

Kambi is the leading independent B2B sportsbook-technology provider — historically full turnkey (platform + odds + trading + risk-management), now increasingly modular.

Porter Five Forces

• ▮Buyer power — high, and rising (the core problem). Once an operator reaches scale it tends to in-house its sportsbook (Kambi lost DraftKings and Penn this way). Modular Odds Feed+ is the defensive answer: stay in the stack even when the operator builds its own front-end.
• ▮Rivalry — high. Competes with operators’ in-house builds, plus SBTech (DraftKings), OpenBet, Betgenius/Genius, Sportradar Managed Trading, BetConstruct and others.
• ▮Barriers to entry — moderate-high. Odds-compiling, trading IP and AI (Tzeract) and a multi-jurisdiction compliance footprint are real, but large operators can and do replicate them.
• ▮Substitutes — the new wildcard. Prediction markets let operators offer sports outcomes via CFTC event-contract rails instead of a licensed sportsbook — potentially reducing demand for turnkey sportsbook tech (cf. Underdog’s pivot). Kambi’s AI/odds could conceivably power PM venues too, but on balance PMs look more threat than tailwind here.
• ▮Supplier power — low. Data inputs are available from multiple feeds.

Situation — Customer Concentration & Migrations

The whole debate sits in the customer base: a few large partners drive the P&L, and two are migrating off / exiting markets even as new modular wins dilute the concentration.

The bull/bear hinges on whether new turnkey + Odds Feed+ wins out-run the FDJ/LeoVegas migration drag and the secular in-housing pull. Q1 suggests the offset is working; FY26’s migrations are the test.

Financials

Figures in EUR (reporting currency). FY25 was the trough; Q4’25 and Q1’26 show the inflection.

Quality of earnings: improving — the Q1 beat was driven by operating leverage (AI trading, OLG volume, strong operator trading margin), not one-offs. But the ~51× trailing P/E reflects still-depressed earnings; the multiple only makes sense on recovery to the €20–25m EBITDA guide.

Forecast

FY26 adjusted EBITDA/EBITAC guidance is €20–25m — clear growth on FY25’s ~€17m, with offsetting puts and takes.

• ▮Tailwinds: mid-single-digit organic growth; new partner launches (Superbet, PMU, ComeOn); full Ontario OLG year; and a fully-AI-traded FIFA World Cup (high incremental margin).
• ▮Headwinds: Colombia tax change (~-€4m revenue); FDJ/LeoVegas migrations; further market exits; FX. Expenses broadly flat despite inflation.
• ▮Our read: guidance looks achievable, with the mix (modular + AI) supporting margin. The swing factor is whether modular Odds Feed+ hits the 10–15% revenue target and whether World Cup over-delivers — either could drive a beat into H2.

Valuation & Scenarios

At ~SEK166 the stock has already captured most of the turnaround. It trades near its 52-week high, roughly at consensus (~SEK165–177) and above Jefferies’ SEK140 Hold target. On a recovering earnings base the forward multiple is far below the ~51× trailing optics, but it is no longer cheap. Our SEK170 PT is consensus-anchored — fair value after the re-rate.

Risks & Verdict

The risks that produced the FY25 trough have not disappeared — they have been offset, not removed.

• ▮Customer concentration. Top-3 (FDJ UNITED, RSI, ATG) still drive the P&L; FDJ exiting markets is a live drag.
• ▮In-housing. The secular reason Kambi lost DraftKings and Penn; modular Odds Feed+ mitigates but does not eliminate it.
• ▮Migrations. FDJ (end-FY26) and LeoVegas (end-FY27) are revenue headwinds through the forecast period.
• ▮Prediction markets. If operators route sports through CFTC event-contract rails instead of licensed sportsbooks, turnkey demand could shrink — a structural, not cyclical, risk to the model.
• ▮Valuation / catalysts. Post-surge, near 52-week highs, ~at consensus and above Jefferies’ PT; Jefferies’ “lacks positive catalysts” concern is harder to dismiss after the run.
• ▮Regulatory / tax. Colombia tax, Brazil, and market-exit dynamics.

VERDICT: HOLD · PT SEK170 (~+2%). A real operational turnaround — AI trading, a clever modular pivot, an OLG win, net cash and a return to EBITDA growth — that the market has already largely paid for. We respect the execution but see balanced risk/reward at ~SEK166: customer concentration, in-housing and the prediction-market overhang cap the upside, while the net-cash balance sheet and buyback cushion the downside. HOLD; revisit as a Buy on a pullback toward the low-SEK130s or a clear beat-and-raise that proves the modular/AI re-rate has further to run.

SOURCES & FLAGS. Price ~SEK166 (Yahoo Finance, 5 Jun 2026; 52-wk SEK99–180; mkt cap ~SEK4.4bn; P/E ~51× TTM; EPS SEK3.24); consensus avg ~SEK165–177 / high ~190 / low ~112; Jefferies HOLD PT SEK140 (StockAnalysis). NOTE the prior clean quotes (SEK137.80 @22 Dec 2025; $13.06 @10 Feb 2026, PitchBook) PRE-DATE the +21% Q1 surge (29 Apr 2026) — current price reflects the post-Q1 re-rate. Fundamentals (FY25 rev €162.0m -8.2%, earnings €6.8m -55.9%; Q4’25 adj EBITA €7.3–7.4m; Q1’26 rev €43.5m, adj EBITDA €14.0m vs €11.8m est; net cash ~€31–45m; €25.8m+€12m buybacks; FY26 guide €20–25m; Odds Feed+ 10–15% target; 60% AI-traded; OLG launch; partners FDJ UNITED/RSI/ATG/LeoVegas/Superbet/PMU/ComeOn/Coolbet/Hard Rock; Omega PAM acq Nov 2025) from Gambling Insider, Investing.com, Quartr, StockAnalysis — some quarterly consensus/EBITDA splits are press ESTIMATES, not read from filings; verify against Kambi’s Q1 2026 report. CEO Werner Becher; Malta-HQ; ~1,049 employees; First North-listed. Rating, PT and scenarios are OUR assessment.

DISCLAIMER. Internal research note for informational purposes; not investment advice, an offer, or a solicitation.