Is This Dirt-Cheap Nano-Cap Hiding a Turnaround? Angler Gaming at 5x Earnings

Recently, I came across a company that caught my eye—Angler Gaming PCL. On the surface, it just looks like another gambling stock: cheap, but struggling over the past few years. Like the rest of the sector, Angler got a massive boost during and just before Covid, only to get absolutely crushed in 2021—a downturn that hit pretty much every gambling stock hard.

At the moment, Angler is trading at about 10x 2024 earnings, so it does look quite cheap. But after digging into their Q1 report and watching a CEO interview on YouTube (which only had around 200 views and was in Swedish), I noticed something interesting. The company is actually on track to significantly increase or maybe even double its earnings this year, despite a large drop in revenues. The market hasn’t reacted at all since the news dropped.

I’ll get into those details in a bit, but first, let’s break down what Angler actually does.

Angler Gaming is basically a holding company that invests in businesses running online gaming services. They own and manage several online casino brands—think websites where people can play slots, roulette, blackjack, and all the classic casino games. Everything they do is fully digital.

Their business breaks down into two main segments: B2C (business to consumer) and B2B (business to business). The B2C business is simply angler running its own casino brands. On the B2B side, Angler offers its technology platform and gaming infrastructure to other companies that want to set up their own online casinos.

Alright, now that we’ve covered what the company does, let’s get into the juicy stuff.

Over the past few years, Angler Gaming’s stock price has absolutely tanked—dropping from around 36 SEK to just 3.6 SEK, a brutal 90% decline. This crash happened because Angler was once a hyped growth story, but as soon as growth stalled—mainly due to falling consumer spending and less gambling, which is the complete opposite of the Covid boom when everyone was spending online—revenues started to decline, investors bailed, and the share price collapsed.

Why I think this is such an interesting situation right now is because of what showed up in their latest Q1 2025 report. Revenue actually dropped 25%, but at the same time, EBIT was up 10% and net income jumped an impressive 60%. That definitely caught my attention. I figured at first it must be some kind of one-off gain, but after digging further that didn’t seem to be the case.

The company made a big change to their B2B business model—they renegotiated their agreements so that, going forward, they’re no longer responsible for their partners’ payment-related costs and operating expenses. Since they don’t provide that service anymore, they can’t charge their B2B customers as much, so revenues fell. But thanks to these changes, their costs of services sold and financial expenses dropped even more. On top of that, the CEO mentioned they’ve been implementing other cost-cutting initiatives as well. That’s what caused profits to jump so quickly.

From their recent Q1 2025 earnings report

And how did the market react? It didn’t. The share price didn’t budge. I think that’s because most of the shareholders still left are the ones who bought into the growth story. So when revenue absolutely tanked, most people didn’t care to look any further. And of course, it’s worth mentioning that the average daily trading volume is only about €23k, so it’s way too small for any big institutions to bother looking at right now.

If you do some simple math and annualize this quarter’s results, the company is now trading at roughly 4.5x 2025 earnings. Of course, I want to be careful here—maybe there’s something management isn’t telling us, and I definitely want to make sure the revenue drop isn’t hiding some real underlying issue.

The way I approached this was by digging into their KPIs.

This might seem a bit overwhelming at first, but if you just focus on customer deposits, revenues, and EBIT, you’ll notice a pretty clear correlation between them—until the most recent quarter. In Q1, customer deposits actually hit their highest level since 2021 and EBIT went up, but revenue dropped sharply.

The key thing here is that customer deposits—the money players are actually putting in—are not just holding steady, they’re trending upward. If this earnings boost was just a fluke or masking some underlying problem, you’d expect deposits to drop or at least slow down. But instead, deposits are trending upward, which signals that the underlying business development is moving in the right direction.

On top of that, the CEO bought about €200k worth of shares in December 2024 and publicly stated that his purchase was because he was pleased with the company’s increased profitability. That’s a pretty significant move. Given the size of the company, his salary—although not publicly disclosed—is likely not far off from the amount he invested. So he’s putting a substantial portion of his own pay on the line.

Another thing worth mentioning is Angler’s dividend history. Between 2017 and 2022, the company paid out over €27 million in dividends—which is actually more than its current market cap. They stopped paying dividends in 2023 and 2024 due to financial struggles, but now in 2025 they’re set to pay out €1 million again.

I’m not the biggest fan of dividends myself because of the whole double taxation issue, but I see this more as a positive sign that the company’s situation is improving. Still, getting a 4% dividend yield while you wait for the market to notice the mispricing isn’t a bad deal either.

Of course, there are some uncertainties you’ll need to look into yourself, so here’s a quick rundown. First, their receivables have been growing quite a bit lately, even though revenue and profit haven’t. That raises the question: could there be issues with B2B partners paying on time, or is there something else going on that management hasn’t addressed—or that I might have missed?

Another thing that stands out is their tax situation. They’ve paid almost no taxes, and there are no deferred taxes either. The annual report mentions that most subsidiaries are supposed to pay a certain percentage, but it also says they had “no taxable income,” which is strange given the company’s strong profits. And even where some subsidiaries did report profits, the taxes paid seem really low.

Lastly, it’s tough to find detailed information on their B2B business—how contracts are structured, what the terms look like, etc. That lack of transparency means there could be risks here that aren’t obvious.

Either way, here’s how I see this opportunity: Right now, you can buy a company at around 10x earnings that’s just made a major structural change, setting them up to seriously boost their profits this year. That should push their valuation down into the mid single digits by year-end if things go as expected. And if sentiment around the sector stays the same or even improves—which seems likely given how depressed it is right now—there’s definitely potential for some multiple expansion.

Let me give you a quick snapshot of just how bad the sentiment is around this sector right now: I heard someone describing this exact situation. He said there could be 100% upside in the stock this year with earnings almost doubling and putting a 10x multiple on it. But when asked if he is invested, he said no—mainly because of all the uncertainty and negative sentiment at the moment. Ironically, he owned the stock back when it was growing quickly. I think that really sums up the vibe around Swedish iGaming and gambling stocks in general: people loved them during the growth phase, but as soon as consumer spending dropped and gambling slowed down, investors bailed and the stocks got crushed. Right now, most people still want nothing to do with the sector, still feeling burned from the massive drawdown in 2021.

Looking further ahead, though, if consumer spending picks up—which we’re already seeing hints of, with customer deposits rising since 2022—there’s a good chance we’ll see growth return to these companies and sentiment turn more positive.