Ricardo Pillai
3 min read
In This Article:
We came across a bullish thesis on Super Group (SGHC) Limited (SGHC) on Archetype Capital’s. In this article, we will summarize the bulls’ thesis on SGHC. Super Group (SGHC) Limited (SGHC)'s share was trading at $9.62 as of 12th June. SGHC’s trailing and forward P/E were 36.9 and 15.58 respectively according to Yahoo Finance.
Super Group is a profitable, debt-free iGaming operator with a dominant presence in high-growth international markets, primarily the Middle East, Africa, and North America. It owns marquee brands like Betway and Spin Casino, both managed under the leadership of Neal Menashe, a 23-year veteran with four years as CEO. Betway has evolved beyond sports betting, with its integrated casino offering now generating significantly higher margins.
Despite consistent revenue growth—from €476M in 2019 to €1.4B in 2023—and solid 20% EBITDA margins, Super Group trades at a significant discount to peers, driven by factors like its reverse SPAC merger in 2022 and partial withdrawal from the fiercely competitive U.S. market. However, this retreat has allowed the company to focus on its more profitable and defensible markets.
A 21% YoY increase in monthly active users (ex-US) and ongoing QoQ growth in 2024 point to a business returning to steady momentum. Super Group has also acquired its sportsbook technology provider, Apricot, a move expected to enhance long-term margins and operational efficiency despite modest near-term earn-out obligations. Management’s disciplined capital allocation—balancing marketing, buybacks, and acquisitions—is reflected in their deliberate 27% revenue spend on marketing to sustain long-term growth.
With sticky products, deep regional expertise, and strategic cost control, the company remains well-positioned. Valuation appears deeply misaligned, with a 5.1x EV/EBITDA multiple despite steady growth and quality assets. If margins stabilize and revenue continues its upward trajectory, the stock could rerate meaningfully, offering investors an asymmetric opportunity with substantial upside and limited financial risk.
Previously, we highlighted a bullish thesis on DraftKings (DKNG) by Daan Rijnberk which operates in the same industry , which focused on its leadership in the U.S. online gambling market, rapid revenue growth, expanding EBITDA margins, and increasing free cash flow. While DraftKings offers high-growth potential with exposure to U.S. regulatory tailwinds, Super Group provides a more stable, margin-rich model abroad—making both stocks complementary plays on the broader digital gambling theme.
