Is this news just what the Entain share price needs for a fresh boost?

The Entain share price has fallen in the past few years. But the latest Q1 update suggests the future is starting to look a bit brighter.

| More on:
Middle-aged black male working at home desk

Image source: Getty Images

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

The Entain (LSE: ENT) share price was flying high in 2021. The online gambling firm, which owns Coral and Ladbrokes among others, seemed to be enjoying a nice boost from the Covid impact.

But since that high point, the stock has lost two-thirds of its value. Soaring inflation and high interest rates don’t leave so much spare cash in people’s pockets for a flutter on the gee-gees. The firm even fell to a loss in 2023.

Still, a Q1 update on 17 April helped push the shares up a couple of percent in early trading. Are we set for a return to growth?

Meeting expectations

The first quarter of the year was in line with expectations, with no real surprises.

We’re looking at a 3% rise in reported net gaming revenue, which translates to a 3% drop on a proforma basis. The gains are mostly international. But we saw falls in the UK and Ireland, where gambing regulation continues to be tightened.

So overall, to me it seemed mixed. And I think that was echoed by interim CEO Stella David, who spoke of “strong performances in many of our markets as well as known challenges in others.

I’d say the key thing for investors is that the rot of 2023 seems to have been halted. But more than that, it’s hard to say at this stage.


Broker forecasts are probably unlikely to change much as a result of this latest update. They do show decent earnings growth in the next few years. But they don’t make Entain stock look like a screaming buy to me.

If they’re on the money, we’d still see a price-to-earnings (P/E) ratio as high as 21 even by the end of 2025. It could drop to around 11.5 the following year, which looks a lot better.

But that’s still close to three years out, and a lot could happen in that time. Especially in a risky and volatile sector like gambling.


What would I want to see before I’d think of buying any shares? Well, I’d want to see strong cash flow, for sure. And on that front, things look upbeat.

Despite the bottom-line loss of 2023, free cash flow was still positive. And the City sees it more than doubling by 2026. Gamblers do seem to be very keen on pushing cash in the direction of the bookies.

Will we see a turnaround in 2024? I’d say it’s a clear possibility, but it’s way too early to say just yet.


I’d at least want to wait for interim results, due on 8 August, before I could come close to making up my mind about whether to buy.

But to be honest, it’s not a decision I need to make. I pretty much only buy solid dividend-paying FTSE 100 stocks these days, and those with a good safety moat.

So, Entain doesn’t fit my profile. But I do think shareholders could see a decent second half this year.

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Alan Oscroft has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

More on Investing Articles

Satellite on planet background
Investing Articles

At just under £14, can BAE Systems’ share price still be a prime FTSE 100 bargain? 

Despite its bullish price run, BAE Systems’ share price still looks undervalued to me and appears set for strong growth.

Read more »

Photo of a man going through financial problems
Investing Articles

2 dividend shares I’d avoid like the plague in today’s stock market

The UK stock market is full of high-yield dividend shares that could equate to a steady stream of passive income.…

Read more »

Abstract bull climbing indicators on stock chart
Investing Articles

£17,000 in savings? Here’s how I’d aim to turn that into a £29,548 annual second income!

Generating a sizeable second income can be life-enhancing and can be done from relatively small investments in high-dividend-paying stocks.

Read more »

Investing Articles

With as little as £300 a month invested, this stock could net £16,000 a year in passive income

Putting a few hundred pounds each month into the stock market could eventually generate a five-figure annual passive income, this…

Read more »

Black woman using loudspeaker to be heard
Investing Articles

This dividend stock could pop next week!

This dividend stock happens to have one of the biggest dividend yields I've come across -- 10.7% -- but I'm…

Read more »

Investing Articles

Up 81%, can this FTSE 100 turnaround share keep surging?

This recovering retailer has been one of the FTSE's greatest performers over the past year. Royston Wild considers whether it…

Read more »

Happy couple showing relief at news
Investing Articles

£10,000 in savings? I’d buy 4 passive income shares to target a £100 per week second income!

By buying passive income shares today, I have a great chance to eventually make life-changing wealth. Here's how I'd invest…

Read more »

Man writing 'now' having crossed out 'later', 'tomorrow' and 'next week'
Investing Articles

I think this may be an unmissable chance to buy an oversold UK share before it rallies hard

Harvey Jones piled into this beaten down UK share because it looks cheap and offers a sky-high yield. Now he's…

Read more »