Bragg Gaming Group Inc. (NASDAQ:BRAG) is one of the best long term penny stocks with huge upside potential. On October 17, Citizens JMP downgraded Bragg Gaming to Market Perform from Outperform without a price target. This sentiment was announced as the firm noted that the company’s shares currently trade at a 0.5x discount to peers, given the uncertain outcome and EBITDA impact tied to the loss of a high-value customer (BetCity) and tax changes. Is Bragg Gaming (BRAG) One of the Best Long Term Penny Stoc ...

Core Insights - Brag House is engaging in strategic discussions with New to The Street, a rapidly growing financial media brand with over 3.5 million YouTube subscribers and national broadcasts on Fox Business and Bloomberg [1][5] - This collaboration marks a significant opportunity for Brag House as it prepares to film segments on the New York Stock Exchange, set to air on Bloomberg on October 4 at 6:30 PM EST [2] - The partnership aims to enhance brand awareness and credibility for Brag House, focusing on connecting brands and colleges with Gen Z audiences through innovative engagement in gaming and college sports [3] Company Overview - Brag House is a media technology platform that transforms casual college gaming into a community-driven experience, merging gaming, social interaction, and technology to engage Gen Z [4] - The company aims to provide an inclusive environment for casual gamers while enabling brands to connect authentically with the influential Gen Z demographic [4] New to The Street Overview - New to The Street has been a long-standing U.S. and international television brand since 2009, known for its sponsored programming on Fox Business and Bloomberg [5] - The brand has a significant online presence with over 3.5 million YouTube subscribers and utilizes Times Square billboards for promotion, delivering segments that help companies communicate their stories to investors [5]

Group 1 - Bragg Gaming Group Inc. (NASDAQ:BRAG) is considered one of the fundamentally strong penny stocks to buy currently, despite a reduction in FY2025 EPS guidance from a loss of $0.08 to $0.23, with a consensus estimate of ($0.14) per share for full-year earnings [1][2] - The company's business model is highlighted as a key strength, enabling potential expansion in the US and other markets at a low incremental cost, which is often overlooked in the current bearish market sentiment [2] - Bragg Gaming Group Inc. is expected to achieve double-digit revenue growth and solid margins in the coming years, driven by advancements in proprietary content, as stated by CEO Matevz Mazij [3] Group 2 - The company operates as a Canadian iGaming content and technology solutions provider, offering services to both online and land-based gaming operators, with core products including games, studios, proprietary content, and sportsbook technology [3]

Core Insights - Bragg Gaming Group has secured a new financing agreement with the Bank of Montreal, providing credit facilities of up to US$6.0 million to support working capital and corporate needs [1][2][3] - The new credit facilities replace prior promissory note indebtedness, marking a strategic shift in the company's financial strategy [2][3] - The company aims to strengthen its financial foundation and accelerate shareholder value creation through this new partnership [7][10] Financial Details - The BMO Facilities are secured by a first-ranking security interest over all company assets and are repayable upon demand or after one year unless extended [3][4] - The expected borrowing costs for the BMO Facilities range from 6.9% to 7.9% for Prime-based loans and 5.9% to 6.9% for CORRA-based loans, with standby fees on unused portions between 0.75% and 1.75% per annum [5][6] - Management anticipates that the annualized borrowing costs will be less than half of the previous note debt [6] Strategic Focus - The company is prioritizing margin and cash generation over lower-margin revenue, with a target of achieving a 20% Adjusted EBITDA margin by the second half of 2025 [7] - Recent leadership additions in AI and innovation, along with partnerships with operators like Fanatics and Hard Rock Digital, are expected to drive growth opportunities [8] - The company has realized EUR 2 million in annualized synergies and is focused on sustainable, margin-accretive growth [7][9] Cybersecurity Update - Bragg Gaming Group has resolved a cybersecurity incident detected on August 16, 2025, with no indication of personal information being affected [11][12] - The company has assured customers regarding the security of its game titles and reported no negative impact on revenue or profitability from the incident [12][22] - Knowledge gained from the incident has been applied to enhance cybersecurity defenses [13]

Financial Data and Key Metrics Changes - Revenue for Q2 2025 was €26,100,000, representing a 4.9% year-over-year increase, with a 21% growth excluding The Netherlands [6][20] - Gross profit increased by 10.8% year-over-year to €13,700,000, with a gross profit margin of 52.7%, up 280 basis points [6][22] - Adjusted EBITDA for Q2 2025 was €3,500,000, a decrease of 4.3% from the same period in 2024, resulting in an adjusted EBITDA margin of 13.3% [7][22] Business Line Data and Key Metrics Changes - Proprietary content revenue grew by 270% year-over-year, contributing 14.8% of total revenue in Q2 2025, up from 10.8% a year ago [10][24] - The PAM and Turnkey segments generated CAD3.8 million, accounting for 14.6% of total revenue, down from CAD4.9 million or 19.9% in the same period last year [23] - Aggregated content made up 49.4% of revenue, slightly down from 49.6% the previous year [23] Market Data and Key Metrics Changes - In The Netherlands, the company experienced a 17% decline, outperforming the industry which saw a 25% decline [10][22] - The U.S. market showed significant growth, with proprietary content revenue increasing by 270% year-over-year [10][15] - Brazil's iGaming market is projected to grow from US$3.9 billion in 2025 to US$6.1 billion by 2030, with the company expecting Brazil to account for up to 10% of its revenue in 2025 [17] Company Strategy and Development Direction - The company is focusing on margin improvement and cash flow performance over aggressive revenue expansion due to increasing gaming taxes in key markets [7][27] - A strategic shift is underway to reduce reliance on The Netherlands, with projections indicating a decrease in revenue contribution from 49% in 2022 to 32% in 2025 [31] - The company aims to become an AI-first business by 2027, embedding AI into product development and operations to enhance player engagement and operational efficiency [18][32] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to deliver sustainable profitable growth despite lower-than-expected top-line growth [28] - The company anticipates continued advancements in predictive analytics and the adoption of generative AI for scalable content creation [33] - Management highlighted the importance of diversifying revenue sources and leveraging proprietary content for profitability [31][43] Other Important Information - The company has made key hires to strengthen its leadership in content development and AI innovation [17][18] - A planned realization of cost synergies is expected to provide €2,000,000 in annualized cash savings [8] Q&A Session Summary Question: Revenue contribution from Hard Rock and Caesars - Management indicated a path to reach the previously mentioned 15% revenue contribution from proprietary content, with optimism about performance in the second half of the year [38][39] Question: Future growth opportunities - Management elaborated that highly accretive growth opportunities lie in proprietary content, with a focus on increasing production capabilities [42][43] Question: FX impact on guidance - There was a slight impact from the euro weakening against the US dollar, but it was not significant [41]

Financial Performance - Second quarter revenue increased by 4.9% year-over-year to EUR 26.1 million (USD 30.6 million)[56] - Factoring out Netherlands contraction, revenue growth was +21%[12] - Adjusted EBITDA for the second quarter decreased by 4.4% year-over-year to EUR 3.5 million (USD 4.1 million)[56] - Gross profit increased by 10.8% year-over-year in Q2[20] - Realized EUR 2 million in annualized synergies[12] Product Mix and Content - Proprietary content revenue increased by 44% year-over-year[12] - Proprietary content accounted for 14.8% of total revenue in 2Q25, up from 10.8% in 2Q24[28] - PAM & Turnkey revenue was EUR 3.8 million, representing 14.6% of total revenue in 2Q25, compared to EUR 4.9 million and 19.9% in 2Q24[28] Market Growth and Strategy - U S revenue grew by 64% and Brazil by 56% in the second quarter[12] - U S online casino market is projected to grow to USD 75 billion+ at maturity[36] - Brazil is projected to contribute approximately 10% of revenue in 2025[39] - Total Netherlands market exposure is projected to reduce to 32% in FY 2025, with BetCity revenue projected at 17%[40]

Core Insights - Expanse Studios has formed a content partnership with Bragg Gaming Group to enhance the distribution of its iGaming content across over 30 regulated markets globally, including the U.S., Canada, Latin America, and Europe [1][2] Company Overview - Expanse Studios specializes in B2B iGaming content, offering a diverse portfolio of over 55 proprietary games, including slots, crash games, and table games [2][5] - Bragg Gaming Group is a leading provider of iGaming content and platform technology, with a portfolio that includes proprietary and exclusive casino titles distributed via the Bragg HUB platform [6] Strategic Importance - The partnership is viewed as a strategic milestone for Expanse Studios, aimed at scaling rapidly in the U.S. and European markets, leveraging Bragg's powerful distribution network [3][4] - The collaboration is expected to create synergies by combining Expanse Studios' high-quality content with Bragg's extensive distribution capabilities, enhancing global reach and offering operators a broader range of engaging iGaming experiences [2][3] Market Focus - The U.S. market is highlighted as a key focus area for Bragg's continued expansion in 2025, with expectations for a positive reception of Expanse Studios' content, particularly its crash games [4]

Group 1 - Bragg Gaming Group Inc. (BRAG) has shown strong year-to-date performance, returning about 20% since the start of the calendar year, outperforming the Consumer Discretionary sector which has returned an average of -1% [4] - The Zacks Consensus Estimate for BRAG's full-year earnings has increased by 650% over the past 90 days, indicating improved analyst sentiment and earnings outlook [4] - Bragg Gaming Group Inc. holds a Zacks Rank of 2 (Buy), suggesting a favorable investment outlook [3] Group 2 - Bragg Gaming Group Inc. is part of the Gaming industry, which includes 40 individual stocks and currently ranks 145 in the Zacks Industry Rank, with an average loss of 2.8% so far this year [6] - Capcom Co., Ltd. (CCOEY), another stock in the Consumer Discretionary sector, has a year-to-date return of 16.3% and also holds a Zacks Rank of 2 (Buy) [5] - Both Bragg Gaming Group Inc. and Capcom Co., Ltd. are noteworthy for their solid performance within the Consumer Discretionary sector [7]

Core Insights - The Zacks Rank system emphasizes earnings estimates and revisions to identify winning stocks, with value investing being a popular strategy for finding strong stocks in various market conditions [1] - Bragg Gaming Group Inc. (BRAG) is currently highlighted as a stock of interest, holding a Zacks Rank of 2 (Buy) and an A grade for Value [2] Valuation Metrics - The Price-to-Sales (P/S) ratio for BRAG is 1, which is lower than the industry average P/S of 1.27, indicating potential undervaluation [3] - BRAG's Price-to-Cash Flow (P/CF) ratio stands at 9.51, significantly lower than the industry's average P/CF of 30, suggesting a strong cash outlook and undervaluation [4] - Over the past 12 months, BRAG's P/CF has fluctuated between a high of 19.01 and a low of 6.55, with a median of 13.42 [4] Investment Outlook - The combination of the aforementioned metrics suggests that Bragg Gaming Group Inc. is likely undervalued, making it one of the strongest value stocks in the market based on its earnings outlook [5]

Group 1 - Bragg Gaming Group Inc. (BRAG) is outperforming the Consumer Discretionary sector, with a year-to-date return of approximately 17.8%, while the sector has lost an average of 1.4% [4] - The Zacks Rank for Bragg Gaming Group Inc. is 2 (Buy), indicating a positive earnings outlook and strong analyst sentiment, with earnings estimates increasing by 240% in the past quarter [3][4] - The company is part of the Gaming industry, which has an average loss of 4.2% this year, further highlighting BRAG's superior performance [6] Group 2 - Capcom Co., Ltd. (CCOEY) is another Consumer Discretionary stock that has outperformed the sector, with a year-to-date increase of 8.9% and a Zacks Rank of 2 (Buy) [5] - The consensus EPS estimate for Capcom Co., Ltd. has risen by 2.4% over the past three months, indicating a positive trend in earnings expectations [5]