PLAYSTUDIOS' Integration Of New Casual Games Likely To Drive Higher Margins, Analyst Says Post Upbeat Q4

Benchmark analyst Mike Hickey reiterates PLAYSTUDIOS Inc MYPS with a Buy and a $7 price target.
MYPS delivered better than anticipated 4Q22 and FY22 financial results, exceeding consensus view and guidance on revenue and profit.
The impact of Tetris and Brainium integration and related advertising growth led to the beat.
Users were down in 4Q ex-Brainium, due to a negative economic backdrop impacting consumer behaviors.
Management reiterated their desire to continue acquiring high-quality mobile game providers.
MYPS initiated & completed a $10 million share repurchase program, $40 million remains on the authorization.
MYPS ended the quarter with a strong balance sheet that included $134 million in cash post Brainium acquisition of $70 million, the $23 million in earn-out will not come to fruition.
Scaling playAWARDS into the casual games business will increase platform exposure and legitimatize MYPS as the only comprehensive loyalty solution in the mobile gaming industry.
The company announced a meaningful 14% headcount reduction.
The analyst anticipates the successful integration of their newly acquired casual games will grow AEBITDA margins, as these products monetize through advertising and therefore do not pay a platform fee associated with in-app purchases.
Price Action: MYPS shares traded higher by 19.2% at $4.14 on the last check Friday.

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