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NeoGames S.A. (NGMS), a technology-driven provider of end-to-end iLottery and iGaming solutions, has been making a significant impact in the stock market, particularly in after-hours trading. The company’s stock experienced a notable surge on May 12, 2023, which has piqued the interest of investors and market watchers. The question on everyone’s mind is: why is NGMS stock moving up in after-hours trading?
A Definitive Agreement with Aristocrat
The primary driver behind the surge in NGMS’s stock price is the announcement of a definitive Business Combination Agreement with Aristocrat Leisure Limited (ASX: ALL). Aristocrat, a leading entertainment and content creation company delivering world-leading mobile and casino games, is set to acquire NeoGames for $29.50 per share in an all-cash transaction. This transaction represents an enterprise value of approximately $1.2 billion for NeoGames, a significant valuation that has undoubtedly contributed to the increased trading activity and subsequent rise in the stock’s price.
NGMS Stock Strong Historical Performance
A review of NGMS’s historical stock prices shows a steady upward trend over the past month. From April 15 to May 15, 2023, the stock has shown consistent growth, with the closing price rising from $13.02 to $12.84. This strong performance has likely contributed to the increased investor interest and trading activity in NGMS stock.
Impressive Q1 Earnings
NeoGames recently announced its first quarter 2023 results, which were quite impressive. The company reported that its revenues and share of NPI revenues interest totalled $64.3 million, up 187% year-over-year. This significant increase in revenues has likely boosted investor confidence in the company’s financial health and future prospects, leading to increased trading activity and a subsequent rise in the stock’s price.
A Potential Turnaround
In early May, Zacks Equity Research noted that the heavy selling pressure might have exhausted for NeoGames as it is technically in oversold territory. In addition to this technical measure, strong agreement among Wall Street analysts in revising earnings estimates higher indicates that the stock is ripe for a trend reversal. This analysis could have contributed to the increased investor interest and trading activity in NGMS stock.
Conclusion
The surge in NGMS’s stock price in after-hours trading can be attributed to a combination of factors, including the announcement of a definitive Business Combination Agreement with Aristocrat, strong historical performance, impressive Q1 earnings, and potential for a turnaround. These factors have created a positive outlook for the company, leading to increased investor interest and trading activity. As the company prepares for its future under Aristocrat, it will be interesting to see how the stock performs in the coming days.
Unfortunately, we couldn’t retrieve the latest financials for NGMS, but the recent news and historical performance provide a good picture of the company’s current situation. As always, investors should conduct their own research or consult with a financial advisor before making investment decisions.
