Bumble generated free cash flow of $182.4M in the first 9 months of 2025, annualized that is $243.2M. At Bumble’s $454M market cap that is a 53.6% FCF yield, 47.2% after deducting annualized SBC of $28.8M. After repurchasing their tax receivable agreement for $186M Bumble is a business with serviceable net debt of $478.2M and a leverage ratio of 1.78. At this valuation the business is priced for a rapid decline, I don’t believe that’s likely.

Bumble went public using an Up-C structure, an uncommon arrangement that it’s in the middle of unwinding. The added complexity requires a bit more digging which often increases the opportunity that the market is missing something. In this case we have a hidden tax asset and underappreciated forward cash flow. Bumble has two distinct tax assets; traditional NOLs and a massive pool of billions in deferred tax assets that were created through the Up-C structure.

Bumble inc. is the public shell, whereas Buzz Holdings is the private partnership that owns all the assets. A share of the Bumble inc. shell entitles you to a common unit of the private partnership Buzz Holdings. As of Q3 2025 there are 112.7M A-shares of Bumble inc. but the true share count has to include the 37.8M privately held common units of Buzz Holdings which most screeners miss.

In April 2025 Whitney Wolfe and Blackstone were the primary private stakeholders in the partnership with a combined 46,192,185 common units. Whitney then converted and sold 1,000,000 common units in August and Blackstone converted 7,395,159 units and sold them alongside an additional 9M of their pre-existing A-shares. In total Blackstone sold 16,689,884 shares in a block sale for $6.26 per share. This left 37,797,026 common units in the partnership at the end of Q3 and 112,738,975 A-Shares for a true total of 150,536,001 shares outstanding.

In November Blackstone fully exited the buzz holdings partnership and converted their remaining stake into 16,566,115 A-Shares. This greatly increased the public float and left a market overhang that has likely aided in depressing the stock price as the narrative of an insider liquidating plays out and the threat of future sell-off looms.

In Q3 the company believed they are likely to save $493M in taxes from the banked step-up losses. They go on to say to the extent they can realize additional tax benefits they would record an additional $273.3M liability for a total of $692.4M in potential TRA payments. The DTA could be used to shield 100% of their taxes but the terms of the TRA required 85% of these savings be paid to the pre-IPO parties, primarily Whitney and Blackstone. Since this TRA was repurchased for 186M in Q4 this nearly $700 million in TRA tax savings will be converted on a flat line basis to cash flow over the next 10-15 years. Bumbles deferred tax assets as a whole are potentially worth 814.6M in tax savings which is almost twice the total equity value of the business and far in excess of the 14.19M value they are carried at on their balance sheet.

Unlike NOL which do not expire, these UP-C tax benefits expire within 15 years and that timer starts anytime Buzz Holdings common units are exchanged for Bumble inc. A-shares, as a result the bulk of these DTAs expire in the next 11 years. If we discount the 419.1M - 692.4M value of the repurchased TRA at 10% on a straight line basis over 11 years the conservative present value of the asset is $247.5M - $408.8M. Essentially Bumble got a discount of roughly 25-56% when they paid 186M to buyout this TRA on November 6th. This valuation assumes Bumble can roughly maintain taxable income above ~$90M on the low end and ~$250M on the high end for a decade straight, which may not happen. After stripping away goodwill impairments analysts expect FY 2025 taxable income of $144.4M-$151.4M. The present value estimate of the TRA value doesn’t include subsequent tax asset creation from Whitney Wolfe Herd exchanging her remaining Buzz Holdings for Bumble inc. A-Shares. The value of this exchange is dependent upon the stock price when they are converted and has potential to be quite significant if the stock rebounds in the next few years.

In the end the founders got a lump sum for an asset with a lot of uncertainty and they increased the value of their stake in the underlying business which is now primed for cashflow and ripe for acquisition. Perhaps the CEO will cease to be a net seller of stock and use her portion of this payout to increase her stake in the company. The knock-on effect of clearing this $400M non-interest bearing liability was a S&P ratings upgrade from B to B+ closer to the BB- rating they hold with Fitch. This likely allowed them to knock 50 basis points or more off their debt; a refinance announcement is expected during the Q4 earnings on March 11th.

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Evaluating the Underlying Bumble Business

Dating apps are uniquely cyclical. A business of apps analysis from 2025 found that fewer than five percent of monthly subs are still active 12 months later. This makes revenue slightly less dependable than your average SAAS but it also means short term changes in DAU are less dependable predictors of future performance.

Bumble has pretty good geographic diversification, in the first 9 months of 2025 55% of total revenue came from outside the US. Despite what the share price chart suggests the underlying business has markedly improved from its IPO. They now make more in operating income in 3 months than they made in the first 3 years that followed their IPO.

Heterosexual dating apps are effectively a duopoly, if you want to find a wife from the comfort of your iPhone you are either paying Match or Bumble. Sure they each own smaller stand-alone apps like Hinge and Badoo that give the illusion of choice but the pricing power is firmly controlled by these two companies. This concentration combined with the value proposition of finding a wife (or at least a date to your cousin’s wedding) provides these firms tremendous pricing power and healthy operating margins.

Investors were excited to pay a premium for this pricing power during the fervor of Bumbles IPO, inexplicably pricing the company at more than 100x its forward operating income. Today the dating software industry multiples have cratered and both trade close to all time lows. Even the investor darling Grindr has fallen out of favor with investors and is testing healthy but historical lows relative to their operating income.

Stock prices generally perform poorly during a 98.8% multiple contraction. Be aware the above figures for Bumble do not reflect the true share count and as such the market cap in the numerator is understated. The correct ending P/OCF multiple for Bumble is 2.2x and similarly the proceeding BMBL multiples are understated at an inconsistent ratio but the trend is clear. The business didn’t fail, rather investors failed to accurately evaluate it and until recently overpaid quite severely.

Bumble is in the midst of a house cleaning. They are attempting to prune bad actors, and emerge with a cleaner better product and pool of genuine profiles that people will be more prone to pay for. We can see some evidence to their success in the slight uptick in ARPPU in the face of a shrinking userbase. That’s not to say Bumble is in cigar butt mode, in fact the marketing spend pause initiated earlier in 2025 has partially resumed in Q4 and is showing promise that 2026 will be a return to growth.

This return to marketing uplift will be counteracted in Q4 by the effect of the trust and safety measures they began in August targeting bots, perverts, catfish, and other bad actors. They didn’t give an idea of the scale of this targeted account pruning but its possible Q4 paying user decline is more significant YOY than we saw in Q3 despite the uptick in ad spend. This is the cost of cleaning house and management is betting these improvements to their dating pool are worth the friction of their expanded mandatory verification measures.

In the interim KPI’s are falling and Bumble hemorrhaged 18% of their paying users in Q3 2025 compared to the year ago period. It’s not all bad news as lapsed users, while a worrying sign, must simultaneously be valued as an asset of sorts. The cost per install for new users is 4x higher than the cost to retarget return users and the conversion rate for return users to payers is 50% higher. Inactive users are a valuable pool and yet people tend to overvalue software with growing users and undervalue legacy software. This ignores the favorable economic advantage of retaining and retargeting users.

Dating in the AI Era & Surviving the SaaSpocalypse

Software companies are experiencing major selloffs as they face questions over long term viability. Decades of software iteration can now be replicated reasonably well by a Claude prompt in an afternoon. Bumble’s value lies not in its code base but its critical mass of users, particularly women as it maintains a higher percentage of women than both tinder and hinge. Furthermore the free offerings from Bumble, tinder, and hinge are tough to compete with which makes amassing a formidable user base marketing intensive and thus prohibitively expensive for any upstart competitors. The moat certainly appears to be shrinking for everyone in the cloud software subscription business but I think the incumbent dating apps are better positioned than most. Priced near 2x forward free cash flow anything short of immediate miserable failure should amount to a win for stockholders at current levels.

Bumble is planning a mid-year launch of their new Bumble cloud platform which they claim will allow for more nimble feature updates, fixes, and fine tuning aided by AI assisted user insights. They also plan to launch a standalone AI app, the R&D cost of which have already largely been paid for.

While their acquisitions have been duds, 2 of their 3 acquisitions were shuttered within 3 years, their internally developed app BFF (bolstered by their $10M acquisition of Geneva) has fared better. While BFF is not a revenue driver yet, the tepid success of their internally developed apps bodes well for their standalone AI app and provides potential for diversified avenues of growth.

AI has a real use case in automating matchmaking services, picking a partner based on proximity and a photo might not be the best way to skin a cat. We’ll see if the Bumble team have designed a better mousetrap later this year.

CEO & Management - Solid Operators & Lousy Allocators

In June Bumble laid off nearly one third of their workforce. The move is estimated to save them 40M a year, with severance and one time reorganization expenses this benefit largely won’t be recognized until Q1 2026. The knock-on effect for shareholders should be lower annual dilution from SBC. Historically, Bumbles SBC has been excessive in excess of 100M in both 2022 and 2023, due in part to the vesting of pre-IPO options and share class obligations. Stock based compensation was pared down to $25M in 2024 thanks to headcount reductions but it’s growing again. The return of founder Whitney Wolfe Herd as CEO after a 14-month hiatus came with a price tag. She was awarded $9M in SBC and her new CFO was handed $12M. You don’t become the youngest self made female billionaire by not looking out for yourself.

Their sign-on bonuses alone consumed more than half of what they saved by firing 30% of their workforce. Cutting 240 jobs to pay yourself a bigger bonus is not what I’d call moral management. Most people who take a sabbatical aren’t given $9M in equity upon their return. Just because obscene executive compensation is common doesn’t mean it needs to be common in the companies you invest in. Stock based compensation is the silent killer and it need to be monitored closely here.

The biggest risk of value destruction isn’t typically executive compensation but rather capital allocation - particularly the price at which businesses repurchase shares and make dilutive acquisitions. Despite the sky high valuations bumble reached, the highest price they ever paid to repurchase shares was $16.20 per share in 2023.

With the benefit of hindsight their most expensive buyback looks like an overpayment but given their presumably rosier internal outlook at the time it certainly isn’t egregious. My own DCF calculations put fair value today within striking distance at $15.80. Given that the share price traded as high as $78.89, staying above $50 for most of 2021, it’s encouraging that they never repurchased shares at those inflated prices. Subsequent share repurchases of $379.3M from Q3 2023 to Q3 2025 averaged $9.14 per share, retiring another 41.5M shares. In total $400.2M was spent on share repurchases and 50.1M was left in their buy back program heading into Q4 2025. While Bumble investors may have been swept up in the IPO pandemic fervor, senior management showed they don’t simply repurchase shares at any price. I wouldn’t be surprised if they exhausted their 50.1M buyback program in Q4 and repurchased 7-8% of the remaining 150.5M in shares/common units.

Managements track record of acquisitions is decidedly less defensible. They have demonstrated an inability to identify accretive M&A opportunities, their most significant acquisition was a French dating app called Fruitz, Bumble paid $69.7M for the quirky European app and then sunset it within 3 years. They did the same thing with their second acquisition, a $9.8M couples communication app called Official. Their third, and most recent acquisition, Geneva was a $17.5 million community and group activities app that was rolled into BFF - expanding the app from a one on one friend finder to a more robust offering.

The good news is the massive market leader Match group fills much the same role that Jupiter does in our solar system protecting earth by absorbing smaller comets that might otherwise hit us. By purchasing most of the smaller competitors in the dating space they keep the dating app price war a friendly one vs one affair between Bumble and Match. They have probably saved Bumble from overpaying for a bad dating app or two through their aggressive M&A consolidation efforts which include over a dozen companies in the last 15 years.

Fair Value and Risks

My thesis for Bumble is pretty simple: it’s a SAAS business trading near 2x cash flow which is insanity unless it’s about to implode, Bumble isn’t about to implode. The hidden tax asset is worth the price of admission here - if they maintain the current level of profitability the tax asset is worth more than the market cap of the company. Bumble has a decade of tax free earnings ahead making them a prime acquisition target. The bargain priced purchase of their tax receivables agreement has massively increased their expected cash flows which are already at all time highs.

I modeled what I believe to be three reasonable scenarios for future cash flows and I found it difficult to calculate a future in which Bumble achieves an IRR below 10% at the current share prices of $3.02 (Market Cap of 454.5M). Five straight years of double digit declining revenue paired with a significant margin collapse and $80M of lousy acquisitions still lead to cumulative adjusted free cash flow of $607M and a return likely to beat the market.

I believe fair value today conservatively sits near $15.80 per share. None of my base case assumptions to achieve this are particularly heroic. A return to moderate 5% revenue growth following 2 years of stagnation and a 9x EV/EBIT terminal multiple imply a future share price of $43.48 and a $6.5B market cap by 2031. Even at that blistering 70% IRR it’s well below the 7.7B market cap it achieved the day of it’s IPO.

I believe Bumble can sustain high margins of adjusted free cash flow even as they grow headcounts and return to marketing spend. On top of their tax shield, TRA elimination, and the rapidity at which they can reduce debt/interest they have a large lever they can pull with direct to consumer billing. Bumble has just scratched the surface of D2C revenue. As a result of Epic Games lawsuits against Apple and Alphabet app stores cannot gatekeep off-platform transactions and direct billing; as a result Bumble and others can move a significant percentage of large payments to their website and save 27% in fees. A double digit margin expansion across all businesses that rely on mobile app store revenue is underway.

If Bumble moves a quarter of their 1B in revenue off platform by promising 10% discounts that’s an extra $42.5M per year hitting their bottom line (tax free for the next decade).

This company has problems; it’s not the industry leader, users are in decline, they have expensive debt, ARPPU has been flat over 5 years up just 2.5% from its average of $22.10, they have a terrible M&A track record, their largest shareholder Blackstone is exiting: already selling over $100M in stock for $6.26 per share, and the business maintains a tax structure and identity-based voting terms that gives Amber Wolfe Herd preferential treatment and 10:1 voting control until it sunsets on February 16th, 2028. Any one of those factors may send this to the no pile for most investors but in my estimation it doesn’t justify this rock bottom valuation given their tax assets, tailwinds, and price to prospective cash flows.

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I’m long BMBL and a repeat college dropout, not your financial advisor. This is opinion/entertainment, not investment advice. Do your own research; you can lose money. I may buy/sell anytime without notice. No compensation from any company mentioned. Position Initiated February 2026; avg cost ≈ $2.79

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GAMB is a healthy double-digit growth stock trading at a “death spiral” multiple.

Non-SEO channels are expected to exceed search-driven revenue in Q4 2025, significantly de-risking the business.

As the SaaS segment outpaces the affiliate business a multiple re-rating is likely.

The company’s current market cap is now roughly equivalent to the conservative purchase price of just its 2025 acquisitions.

Two companies, both alike in dignity, below fair value, where we lay our equity…

The best two investments I’m aware of today are highly profitable - founder led - beat down businesses that operate on opposite ends of the Gambling industry. Gambling.com Group is an affiliate marketing business rapidly transitioning to sports data services and growing reliable recurring revenue. DoubleDown Interactive (DDI) runs a social casino game and is expanding into online casinos while sitting on a mountain of cash.

Stated plainly, GAMB sends customers to online casinos and sportsbooks on commission and now sells odds data directly to bettors and sportsbooks. DDI dubiously prints money from a freemium app store slot machine ‘game’ - it’s not regulated as gambling because the in-game tokens are worthless, they have expanded into regulated online casinos through recent M&A.

In other words both businesses have a slowing high margin core business segment and a rapidly growing recently acquired tangential business. In both cases the cash these businesses kick off is so substantial relative to the current share price and prospects that it’s positively preposterous. Today we will dig into Gambling.com Group and we’ll look at DDI in depth in a later companion piece.

Business Overview & Prospects (Does a Durable competitive advantage exist?)

For the last 12 months the Total Enterprise Value / Unlevered Free Cash Flow of GAMB is 4.5x and DDI is 0.11x. Both just barely edged out Palantir’s attractive EV/FCF multiple of 342x.

A more accurate comparison to GAMB’s cohorts above shows their depressed valuation.

The core affiliate and advertising segment of GAMB’s business accounted for 76% of its revenue in Q3 ($29.8MM) and the data services segment is a rapidly growing 24% ($9.19MM) that could surpass their core segment in top line revenue as early as 1H 2027. Before 2025 the data services segment was primarily Rotowire, their B2C fantasy sports subscription service, so the segment experienced explosive growth as a result of its Odds Holding acquisition in 2025 recording 304% YOY revenue growth in Q3 2025. OpticOdds in particular experienced 100% YOY revenue growth in Q3, this segment contains the longest term contracts from sportsbooks, prediction markets, market makers, and media who buy their odds data and related services which improves the reliability of GAMB’s revenue as it grows.

“Given the long runway we have for consistent growth in our sports data services business, we believe that this exciting future will be the core of GAMB” —Charles Gillespie (Q3 2025 earnings call)

GAMB has long run affiliate marketing across more than 50 high authority websites cost-effectively connecting gamblers to second and third tier online casinos and sportsbooks at gross margins well above 90%. Fixed costs for that segment amount to a few bucks per year on domain renewals and hosting fees. (The Data Analytics segments spends a few million a year on compute for their high frequency data aggregation and dissemination so gross profit margin takes a hit but the operating margins are still within range of the healthy high margin affiliate business)

They have grown that revenue and profit rapidly, revenue is up over 900% over 7 years, while maintaining high margins since they require no capital intensive physical assets and avoid the regulatory risk inherent in almost every other corner of this industry. Yet their P/S and EV/FCF multiples continue to compress - in complete contrast to reality. The business is better than ever and the team has prudently reduced their dependence on google search by expanding their non-SEO affiliate revenue across email, social media, and revenue share partnerships with sites like USA TODAY where GAMB handles all their on site affiliate gambling advertising.

“In Q4, we expect to generate more revenue from non-SEO channels than SEO for the first time as a public company.”
—Charles Gillespie (Q3 Earnings Call)

The other half of this diversification effort has been three acquisitions, most recently Spotlight.vegas, Rotowire, and Odds Holdings (OpticOdds & OddsJam). I’ll go in depth on the others in the future but for brevity we will focus on the most fruitful so far, OpticOdds. This is their B2B low latency sports odds data business which is expanding beyond odds data into an all in one platform solution offering bet acceptance, settlement, and risk management to growing small and medium sized sports betting platforms. The Jan 1 2025 acquisition was structured as $80MM upfront and $80MM in performance based earn-outs and by successfully doubling revenue this year management expects to happily pay those earn outs.

“OddsJam and OpticOdds are doing really well. They are in a good position to capture most, if not all, of the contingent consideration in respect of 2025. That means that we will owe them $40 million in April ‘26 and $20 million in April ‘27” —Charles Gillespie (Q3 Earnings Call)

This re-evaluation of the earn out likelihood incurred a non-cash accounting expense which likely spooked some looking at the GAAP Net loss reported in the third quarter. Whatever the case the stock price took a 23% single day dive dropping from $6.84 to $5.25 per share. It went on to reach its 52-Week low of $4.60 a week later. An odd reaction to record revenue, and a rare opportunity to invest in a healthy growing company for 180m the very same year that they made a homerun acquisition for a much smaller healthy growing company for $160MM. In fact when you include Spotlight Vegas, the value of Gambling.com Group’s 2025 acquisitions are now greater than their current market cap.

Valuation: Expectations and Reality

As we close out the year management expects to end Q4 2025 with a record $46MM in revenue and EBITDA of $15.41MM. This would bring FY 2025 revenue to $165.2MM with $51.7MM in EBITDA (Up from $127MM revenue and $41.4MM EBITDA 2024). In a recent interview the CEO hinted at outperformance of these Q4 numbers as a result of strong performance from Missouri’s online sportsbook legalization in November.

“If we turn into 2026, we expect to see overall revenue growth in the low-teens…in Q3, our EBITDA margin was 33%...Our Q4 guidance looks towards 33%, 34%. I think that’s pretty indicative for our expectations for 2026.” -Elias Mark CFO

Next year management expects revenue growth of ~14% and EBITDA margins of ~33.5% which represents a 7.4% relative margin expansion and an absolute increase of 2.3% from 2025. That implies $188.3MM / $63MM of 2026 revenue and EBITDA respectively. If their $51.7MM 2025 EBITDA number is correct that would give us 21.8% EBITDA growth next year, far cry from a business in decline.

The company bought back 562,222 shares at an average price of $8.33 in Q3 and they have the buyback budget ($14.4MM) and the trading volume to allow them to repurchase five times as many shares in Q4 if they so choose.

Growth through acquisition is rarely a winning strategy but CEO Charles Gillespie and his team seem to have hit a homerun with Odds Holding. They now have a new portion of recurring revenue growing 100% YOY (Optic Odds) and despite a recent stumble their core business has been no slouch itself organic growth in the affiliate marketing business averaged 50% from 2017 to 2024. Most recently falling from 41% in 2023 to 2% in 2024. They don’t have DDI’s massive cash pile but they have reasonable debt and multiple binary state legalization outcomes likely to occur in the next 18 months all of which are not priced into their guidance.

All told GAMB has sextupled EBITDA and quadrupled revenue since 2021 but despite it all the share price highs of 2021 were three times what the much improved business trades at today.

Inflection Point: What may move the multiple?

There aren’t many healthy companies with a market cap less than three times management’s EBITDA guidance for next year but here we are.

Buybacks are underway but the cash on hand is a bit sparse so buybacks won’t be an enormous lever. The Swish lawsuit will play out in 2026 and any news of a settlement, win, or dismissal will move the stock price. Even a partial loss may be viewed positively as it removes the overhang of uncertainty that investors hate.

Trump has teased the idea of a complete elimination of taxes on gambling winnings. This would be an enormous boon to the industry and a departure from the tax changes implemented for 2026 in his Big Beautiful Bill which limited tax losses to 90% of total gambling losses. December 9th aboard Air Force One trump said,

"We have no tax on tips, we have no tax on Social Security, and we have no tax on overtime. No tax on gambling winnings? I don't know... I’ll have to think about that."

Like all trump musings it should be taken with sizeable salt, as it stands we’re one day away from taxes getting worse for gamblers on January 1st 2026.

The coming state legalizations are binary events which are easy to understand growth catalysts as America is Gambling.com groups largest single market. In 2024 US, Mexico, and Canada accounted for $55MM of their total $127MM in operating revenue. Ireland and the UK brought in $39MM. Americas dominance on their income statement only grew in 2025 and this is notable since online gambling was only legalized in the US in 2018, whereas GAMB formerly KAX media has had a 16 year presence in the UK/Ireland.

As the full breadth of American degeneracy is unlocked state by state we will see spikes in revenue and eventually a spike in that valuation multiple. But for a long term shareholder the longer valuation remains disconnected and depressed the longer GAMB can cheaply buy back shares, increasing our stake, and cheaply and tax efficiently compounding our EPS growth. The only time depressed stock prices are a bad thing is when you’re holding a bad business you want out of or the SBC outpaces share repurchasing.

The most likely catalyst to move investor sentiment is just continued quarterly growth. It’s a small cap sin stock but its well covered for its size and as the sexy SAAS data business outpaces the boring affiliate business someone at a bank will report the obvious long after its become obvious.

Management Ability & Ethics

A good quick litmus test for ethics, alignment, and the health of free cash flow is how aggressively management uses stock based compensation relative to their revenue and free cash flow.

Since their IPO the value of their yearly SBC has increased 3.5x, while significant, it is still being outpaced by free cash flow growth which in 2025 is 4x what it was in 2021.

We can see stock based compensation is a factor worth watching sitting at around 4% of revenue. Since their IPO the company has generated $49.4MM in FCF of which they used a sizable $18.3MM for SBC. Roughly 37% of their total free cash flow has gone to employees, YTD that percentage of FCF flowing through to SBC has dropped to 21% which you would hope continues to drop as they grow.

Looking at dilution as a whole we can see share count is relatively stable for a small young company as they rarely issue shares as a part of their acquisitions, using only $8MM worth of shares in their $180MM Odds Holding Acquisition. As I finalize this article on December 30th their CEO announced that of the remaining $60MM in Odds Holding earn outs they have agreed to pay $40MM early in all cash (saving themselves about $1.3MM in early payment).

This reaffirms my earlier point and also adds a potential stock price tailwind, the former odds holding owners might like to own a larger piece of their new combined business especially at these depressed prices and they were just handed $38,700,000 dollars by which to do it.

Insider ownership as it stands today shows CEO Charles Gillespie and his co-founder COO Mark Blandford maintain healthy large stakes in the business. Charles Gillespie has been slowly reducing his stake since the IPO but recently raised his stake for the first time to just over 11%.

In a later article I’ll look at their historical use of share repurchases and see if it looks to be a reasonable and consistent use of capital. But for the sake of brevity from what we’ve seen of his acquisitions play out, pace of historical growth, and what he’s said throughout 18 earnings calls I like him and his team. Talent as an operator is always tougher to quantify but his talent in capital allocation has been pretty darn good.

Prediction Markets, Risks, and Unknowns

To accurately assess a business it needs to be simple enough to understand, or you need to be sophisticated enough to understand complicated businesses. I can’t differentiate a soup spoon from a ladle so I stick with simple businesses and although ever expanding Gambling.com Group remains simple enough. The areas we need to explore deeper to get a full appreciation for the risks and strategic position of GAMB’s business are five fold:

1. Understand the health of the sportsbook and casino middle class. Gambling.com makes most their money with tier 2 & tier 3 operators and a single Casino/OSB ruling all is bad for business.

2. Assess the competitive landscape of the B2B odds platforms.

3. Quantify the risks from the fickle google algorithm and search rankings.

4. Understand where the industries of gambling and sports betting are going/growing and the impact of prediction markets within the US and abroad.

5. Determine the financial risk AI poses to search as we know it and how quickly it could reduce future affiliate revenue in a worst case scenario.

6. Quantify their exposure in the Swish Lawsuit, likelihood of future lawsuits, and subsequent repercussions on long term viability of their SAAS business.

I won’t cover it all here today but let’s examine the most impactful; AI and the meteoric rise of prediction markets, but first an uninformed comment on the lawsuit from a community college dropout.

Swish Analytics is a smaller private company that sued Odds Holding for scraping their data at the end of 2024. By headcount they are approximately a quarter of the size of GAMB and their case seems to have some validity as the first motion to dismiss was rejected at the beginning of the month. I believe GAMB has insulation from potential financial penalties of the Swish lawsuit as it was filed exactly a day before they acquired it. The Right of Set-Off allows any lawsuits pre buyout to be covered by future earn outs owed to the founders of odds holdings. Whether management expects to be indemnified from any financial penalties I’m not clear, they are certainly still paying lawyers fees and exposed to the more foundational risk that they get cut off from fanduel and bet365 analytics. If the case goes forward and they lose, they likely need to pay up to use the data or get locked out entirely, partially crippling some of OpticOdds offering and to a lesser degree OddsJam.

This is all speculation, I haven’t come across anything concrete outlining the specifics of their acquisition terms sheet or read any illuminating comments from management. I asked Gemini about the lawsuit but it didn’t add much and even worse when asked for a good sportsbook in NY it sourced SportsHandle.com which is run by Better Collective GAMB’s nemesis in the affiliate business.

Much of this 63% YTD decline in share price is owed to fear surrounding the expected AI assisted suicide of their affiliate search business. AI may kill search as we know it one day but a quick look at google’s search revenue show’s us it is not this day.

The plain reality is google search remains strong and they are incentivised more than anyone to maintain its integrity while integrating it further into Google Gemini.

Uncertainty around GAMB’s place in this AI future, in part, is what led to this value investing opportunity. AI and the rapid rise of prediction markets threaten to reshape the landscape of both their businesses. Prediction markets in particular are expanding aggressively into sports betting where it offers systemically superior margins. Although regulation is still in flux, it is plausible that Polymarket and Kalshi will remain available in states and to age groups (18-20) where sports betting is still illegal. The market doesn’t like uncertainty, but there’s good reason to expect this prediction market growth while cannibalistic to existing sportsbooks will be additive to the overall growth of the industry bringing new customers that GAMB can continue to profitably funnel to a changing landscape of operators.

The risk for GAMB is that prediction markets inherently improve with more users and greater liquidity which may lead to a winner takes all situation. By contrast FanDuel and DraftKings together command around 60% of the sportsbook market in the US which leaves a large healthy market of second tier and smaller niche operators which are Gambling.com Group’s bread and butter. Small sportsbooks can’t afford to spend the millions per year in compute required for up to date odds and bet settlement, OpticOdds offers this to them at a fraction of the price.

While sportsbooks are regulated by state Gaming Commissions the prediction markets fall under the purview of the Commodity Futures Trading Commission and are regulated at the federal level. As it stands in the US 19 states have yet to legalize online sports betting most notably California, Texas, and Georgia. Those 19 states account for 37% of the US population, a 124,000,000 untapped market that prediction markets are unlocking. If Gambling.com can integrate themselves deeper with prediction markets through both the customer funnel portion of their business and the odds data services business, this potential risk becomes a huge tailwind.

Where things get murky for GAMB is in their ability to sell OpticOdds services to prediction market makers. Prediction market odds are self setting, for every winner there is an equal loser. A zero sum game where the probability becomes the payout doesn’t require risk mitigation services the way a traditional sportsbook operator needs to balance exposure to guarantee profit. They only really need binary bet settlement and the starting point for the original line.

Timely bet settlement as it relates to sports betting is where OpticOdds has a use case. This service could be further expanded if prediction markets get deeper into live sports micro market betting. As it stands OpticOdds is the primary sports data partner for both Kalshi and Polymarket. They are also used by Robinhood and indirectly by Coinbase both of whom use Kalshi under the hood for their prediction market offerings. GAMB is perhaps best positioned to profit from prediction markets through their traditional affiliate marketing, media partnership advertising, and public facing OddsJam subscriptions. It seems the market is missing the explosive growth opportunity of prediction markets that GAMB is just starting to capture.

Conclusion

Often in value investing we must find mispricings by looking at debt-laden declining businesses or businesses otherwise encumbered by some combination of misfortune or managerial shortcoming - the longer I looked into Gambling.com the more I liked and the farther the stock price fell. We are looking at a business with consistent double digits revenue/FCF growth and a low single digits valuation that has multiple regulatory tailwinds, an aligned management, is capital light, has reasonable debt, durable 49% recurring revenue, fruitful acquisitions, is in a growing industry and its trading as though the business is dying while it’s rapidly growing, de-risked, and diversified.

A single year of slow down in their core affiliate business (from a google search update that erroneously prioritized spam content overseas) does not justify a valuation multiple under 4x FCF when the company as a whole is maintaining strong growth and guiding for more strong growth. Operating expenses need to be monitored as the company now manages ever higher headcounts across two distinct business segments. Despite these challenges it should be trading at a premium and the $14.4MM in share repurchases coming down the pipe will be a welcomed boon to my EPS in the coming years as top and bottom-line growth continues (at least until they effectively undo it in ~8 quarters with stock based compensation). It’s a tragedy they don’t have more dry powder to use on buybacks but as it stands they will end 2025 with roughly $114MM in net debt. In addition to that they have a discounted fair value of non-current contingent considerations from Q3 2025 of $16.1MM which will be raised to ~$42MM in Q4 to reflect the discounted fair value of the final $40MM in contingent considerations owed for Odds Holding on April 1st 2027 as well as a max of $22MM owed to Spotlight.Vegas, half due April 1st 2027 and the second half due a year later. This definitely limits buybacks and acquisitions in 2026 but is not yet a concern considering FCF is north of $40MM a year, they should have over $50MM in undrawn credit, and they remain under their wells fargo leverage covenant of 3:1.

Accounting for SBC the adjusted EBITDA since the 2021 IPO has grown from $16.4MM to an expected $44.7MM in 2025 - that’s a CAGR of 28.5%. Next year’s conservative management estimate of $63MM in adj EBITDA (after subtracting $8MM in SBC) would put us at another year of 23% growth.

My base case DCF above assumes 2026 revenue and margins mildly underperform management’s expectations and then averages 12.5% growth thereafter as operating margins stabilize below historical levels. Assuming a modest terminal multiple the stock is a 7-bagger with a fair value today of $20.58. If growth instead were to match historical levels and it is assigned a multiple to match it becomes even more wildly lucrative. The margin of safety here is so great that either of their business segments could fail completely in 2026 and the remaining segment would still justify today’s enterprise value.

I like the risk reward here the death of search has been exaggerated - the major acquisitions have been fairly priced and have set them up with a hand in every pot: gambling, sportsbooks, and entertainment all while avoiding the regulatory risks inherent in those businesses.

I’m long GAMB and a repeat college dropout, not your financial advisor. This is opinion/entertainment, not investment advice. Do your own research; you can lose money. I may buy/sell anytime without notice. No compensation from any company mentioned. Position Initiated September 2025; avg cost ≈ $6.12

KVUE shares have fallen over 20% on political headlines and media coverage disproportionate to Tylenol’s actual revenue contribution.

Even under extreme assumptions, pregnancy-related Tylenol use represents <1% of company revenue, suggesting an overreaction.

KVUE maintains durable brands and a high dividend yield, but payout levels and slow growth raise sustainability concerns.

The FCF yield is now higher than its former parent JNJ, if multiples continue to compress it could become attractive.

When the President of the United States holds a dedicated press conference linking your product to autism it’s a bad day for business. But like most financial headlines the reaction is often worse than the reality and therein often lies opportunity.

Shares of Kenvue Inc. are down 11.8% just 3 days after RFK Jr. and President Trump warned pregnant women, “Don’t take Tylenol. Don’t take it.” and cumulatively down 21.3% since the WSJ scooped the impending announcement 2 weeks prior.

The reaction from the media has been largely skeptical and critical as they are with all Trump assertions. It’s difficult to determine what the epistemological truth is regarding these claims, that’s above my intellectual competency.

So whether the new Department of Health and conservative President are correct, or whether journalists — educated by liberal professors, employed at liberal publications, headquartered in liberal cities, and reliant on pharmaceutical companies for 40% of ad revenue — are right, it’s not something I can confidently conclude

Luckily I don’t need to, it’s much simpler to estimate how much revenue Tylenol contributes to Kenvue and see if a substantial decline in that income would be commensurate with the market reaction. Spoiler, it’s not.

Tylenol accounts for less than ~10% of their revenue. Pregnant women account for 2% of the population and generously assuming they take Tylenol at 400% the normal rate -pregnant Tylenol use would account for 8% of total Tylenol sales. If no pregnant woman swallows another Tylenol then KVUE revenue would drop less than 0.8%. The 21.3% drop in share price, although part of a pre-existing downward trend, is an overreaction.

Obviously there’s further incalculable brand damage and it certainly doesn’t help existing Tylenol lawsuits that are still in appeals when the FDA adds a warning to your label that it “may be associated with an increased risk of neurological conditions such as autism and ADHD in children”.

This offshoot of JNJ is no stranger to consumer harm cases, when it was a division of JNJ their asbestos contaminated Talc-based baby powder led to one of the largest ongoing landmark consumer harm cases in American history. Part of the reason KVUE was spun off was to rid JNJ of the risk of future consumer lawsuits. For their part KVUE is indemnified for the baby powder cases and have since switched to corn starch.

Overall I see the net effect on revenue and legal risk as minimal. The reaction thus far appears to be disconnected from reality but has it made KVUE an attractive investment?

Kenvue is the slow growing former consumer health division of JNJ, they were spun off in 2023 primarily so JNJ could focus on, and be valued by, their promising high growth divisions. KVUE has 3 primary segments that house huge name brands:

Self care: Tylenol, Motrin, Benadryl, Nicorette, and Zyrtec

Essential Health: Listerine, Johnson’s, Band-Aid, and Stayfree / o.b. tampons

Skin & Beauty: Neutrogena, Aveeno, Dr.Ci:Labo, Lubriderm, and Rogaine

Mind share is extremely valuable and a potent contributor to that durable competitive advantage Buffett is always bandying about. When a product is so ubiquitous in language that it replaces the product category it becomes tough to usurp when it carries recognition without ad spend. People don’t ask for a face tissue or a cola; they ask for a Kleenex and a Coke. Proprietary eponyms are the height of mind share and KVUE owns 4 of them: Band-Aid, Tylenol, Rogaine, and Benadryl.

Unfortunately revenue growth reflects the maturity of this mind share - it has averaged a measly 1.54% over the last 4 years. That’s why stalwarts are a tough category of businesses to invest in. As of 9/25/25 they have a market cap of $32.3B, reasonable net debt of $7.6B, and healthy double digit ROIC of 13.4%. Dividend yield sits at 5.2% and their dividend payments in 2024 were 16.7% larger than their free cash flow that year - that’s not sustainable. JNJ was a dividend king, 63 years of increasing its dividend without fail. Roughly 75% of KVUE investors are former JNJ shareholders, many of whom are dividend investors. If the dividend gets cut, they will lose many of those investors.

Over the last 12 months they issued $193MM in stock-based compensation, repurchased $271MM in stock, paid $1,571MM in dividends and brought in $1,627MM in FCF. The relatively minuscule buybacks relative to dividends tells us management doesn’t think the business was priced particularly attractively this year. Looking at the EV/FCF, I would have to agree but thanks to the sell off it’s trending in the right direction.

There’s no need to dig deeper into management, for me the value isn’t there yet. I love quality brands even when they’re generic antihistamines and hair loss foams, but I don’t love paying 18x FCF for a stalwart that just got put on notice by a Kennedy. I would need to see the EV/FCF multiple drop below 12x before I would be interested in KVUE. I’ll keep an eye on it, Q3 earnings are in November, if the sell off continues and share prices fall a further 34% to $10.65 I would start a position.

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NNDM offers a rare negative enterprise value asset play, with a strong balance sheet and significant margin of safety despite past mismanagement.

New management, backed by major shareholders, is aggressively cutting costs offering hope for a turnaround.

Even in a liquidation scenario, shareholders could see a 50%+ premium, while operational improvements or a buyout could drive shares much higher.

With revenue set to double and a unique AME/PCB/SMT niche, NNDM is well-positioned if management avoids past mistakes and industry demand holds.

3D printing had a second bubble in 2020. Thanks to covid, additive manufacturing looked like the obvious solution for our new supply chain-strained world. In 2020 the Fed funds rate hit 0% and margin was cheap - IBKR margin rates fell below 1%. Stimulus checks were cashed and robinhood retail traders were speculating from home. SPAC decks promised years of pie in the sky 80% revenue growth while crazy aunt Cathie Wood and her ARKQ/PRNT ETF's amplified the 3D printing hype for everyone in the space. (In fairness to Cathie, PRNT has only fallen 50% in the same period NNDM tumbled 90%)

Nano Dimension Ltd. specializes in Additively Manufactured Electronics which allows for rapid PCB prototyping and enables DOD contractors, NASA, and others to shirk reliance on foreign fabs (They make machines that squirt conductive ink).

Management took full advantage of the renewed 3D fervor and began aggressively raising money through equity offerings - which was a very good move. By the end of Q1 2021 they had raised a staggering 1.5 billion dollars. They then spent the next 4 years burning a billion dollars through overpriced, arguably interest conflicting, acquisitions and the aggregate operational losses they accrued - this was decidedly less good. Turns out the safety provided by a huge pile of cash is limited by the rate at which huge fools spend it. Instead of getting a dollar for 70 cents these bad boys from Tel Aviv were spending a dollar to be indebted for 26 cents. In under 4 years they made 8 acquisitions of unprofitable companies mostly within the industry spending just over $500,000,000 to subsequently lose millions more running them at a loss. This kind of big brained M&A activity requires top executive talent and they paid out $125,000,000 in stock based compensation for their unrivaled talent. Today 5 of the 8 acquisitions are shuttered or bankrupt.

By the time activist investors at Murchinson Ltd. wrangled control of NNDM at the end of 2024 they had roughly 450m left of the 1.5b war chest (after accounting for the estimated impact of the DM and Markforged acquisitions). The former CEO Yoav Stern successfully delayed his ousting by adopting and renewing a poison pill plan, turning down a $990,000,000 buyout offer from Murchinson representing a 52% premium to shareholders, was voted off the board by shareholders in an extraordinary general meeting but just ignored it contesting ADR shareholders right to have a vote, he then delayed another EGM citing the war in Gaza, and made a failed bid to give himself 10% of the company for pennies by attempting to reduce the exercise price of his options from $6.16 dollars per share to $2.46 dollars per share (shares traded at $2.36 at the time). A true warrior, Stern went down fighting and spent millions of Nano Dimensions cash reserves on lawyers in the process.

For their part Murchinson has been largely uncommunicative in the 9 months since assuming control but the brief Q1 2025 earnings call showed they can aggressively cut costs and for the first time in 39 quarters the stock based compensation was a negative number. As Stern said in the 2023 Q1 earnings call, “We can turn this company, which we will, profitable very quick”. Perhaps it is possible and the man who presided over 2 accidentally profitable quarters in 20 is right. The Q2 earnings this month will be messy as it's the quarter in which Desktop Metal was regrettably acquired for $179,300,000 and shortly thereafter declared bankruptcy. For their part Murchinson vehemently opposed the acquisition claiming they could wait and buy DM for pennies on the dollar or not at all during bankruptcy. Unfortunately Yoav Stern inked that ill fated deal as his swan song to NNDM investors.

We will see what the combined books look like for Nano Dimension and their recent surviving acquisition: Markforged, a business with a commensurate cash burn to Nano Dimensions core business (roughly ~$62,000,000 in the TTM before they were acquired). The CEO who replaced stern, Ofir Baharav, spoke optimistically of Markforge saying it “has shown great promise in terms of its software, including machine learning, systems installed base on manufacturing floors, and organizational structure that can enable Nano Dimension’s accelerated growth.”

Baharav spoke honestly about the liabilities and liquidity issues of Desktop Metals and incurred over 28 million in legal fees trying their best to back out of that deal, so his praise for Markforge is likely not lip service.

I have tepid confidence that the new, mostly american, management installed by the canadian investment firm can turn around this Israeli company with offices across 7 countries. Lucky for us the market price has yet to reflect a shred of optimism. The Enterprise Value remains firmly negative as if it's just wealth destroying business as usual. This creates a massive margin of safety in what is essentially an easy asset play that happens to include 2 innovative but unprofitable businesses in a once very hyped industry which is now begging you - in fact paying you to invest in it.

If Murchinson goes full corporate raider and moves to liquidate, unlikely by their comments, long time investors are out of luck but the current 300M market cap / $1.38 share price sits squarely in the gravy zone. They could sell both Nano Dimension and Markforged for a dollar next week, divvy out the balance sheet and shareholders would still conservatively receive a 50% premium on the existing share price before taxes. If they find an outside buyer for one or both businesses or plan to tender another reasonable buyout themselves ~740m would be a conservative estimate which would land us in what finance professionals call the deep gravy fun zone at $3.42 a share.

What I expect to happen is an honest effort to right the ship, the incentives are properly aligned and the people in charge are themselves working at the behest of major shareholders. Major shareholders that bought in at roughly twice the current market cap. If the ship can’t be righted, pending shareholder approval and Israeli solvency test regulation, they can dole out cash and their 9,695,115 shares of Stratasys valued at ~109,000,000 (They are the second largest shareholder in SSYS at 11.3% the result of a prior failed takeover). Like all Yoav Stern moves he overpaid for SSYS but despite being down, Stratasys has rebounded recently and has risen 66% over the last year. These actions alone would return over $2.0 a share to shareholders and they can then spinoff, shutdown, or sell portions of Markforge and NNDM core business then allow what remains to recapitalize and be valued appropriately without the lingering risk it poses to the sum of its cash and equity investments.

We are seeing for the first time major nimble challengers to the defense primes with Anduril and Palantir, accelerated innovation and rapid prototyping in the aerospace and automotive sectors - all areas where Nano Dimensions core competencies can be utilized. Share buybacks would signal the new management's confidence in the underlying business and a significant 10% repurchase could be utilized for less than they spent on lawyers last quarter but I’m equally pleased by the prospect of a swift buyout offer or any other guaranteed method of unlocking immediate shareholder value.

NNDM is competing in an industry with more bankrupt corpses than profitable competitors. But the margin of safety here is immense, they have a unique AME/PCB/SMT niche, revenue (and expenses) should double next quarter thanks to Markforged, and they have a better balance sheet than all their competitors. They could buy $MTLS or $DDD tomorrow while $SSYS has already deftly escaped total acquisition. It’s not often you can invest in cutting edge technology at negative Enterprise Value. Additive manufacturing is foundational to the 4th industrial revolution - or so I’ve read on blogs that use sexy terminology. From defense to dental and satellites to shoes the machines Nano Dimensions manufactures are in use. Their business appears highfalutin but ultimately it's a classic razor and blades model - sell the machines and then continue to sell the materials, support, and maintenance services. In 2024 Markforged and Nano Dimension combined derived 35.7% of their revenue from that important consumables and services portion of their business up from 31.2% the year prior. As the high margin segments grow profitability will follow.

The stock price is stuck in a state of max pessimism while their management and outlook has already massively improved. A classic case of follow the raider. Their ability to compete against the dwindling competition in the space and to fend off cheap chinese challengers like Farsoon in the future will determine where they go in the next 5 years. But success in the next 5 months is much simpler, management just needs to announce a path forward and unlock the value sitting on their balance sheet.

Given the current share price and average daily trading volume they are rate limited to around 18m of share buybacks per quarter. It will take years to return a third of the estimated 475m left on their books through buybacks alone and I get the feeling Murchinson wants more immediate results. I would like to see a special dividend of $1.92 announced (139.1% dividend yield) and to retain shares in a leaner business focused on profitability free from the M&A / G&A campfire that Yoav Stern and his board kept fed for far too long.

I’m long NNDM and a repeat college dropout, not your financial advisor. This is opinion/entertainment, not investment advice. Do your own research; you can lose money. I may buy/sell anytime without notice. No compensation from any company mentioned. Position Initiated August 2025; avg cost ≈ $1.39