Super Group Stock Soars as Africa Bets Hit
Posted on: September 15, 2025, 06:16h.
Last updated on: September 15, 2025, 06:16h.
- It’s one of this year’s best-performing gaming stocks despite leaving the US market
- Africa supports the investment thesis
Already one of this year’s best-performing equities, Super Group (NYSE: SGHC) landed a new fan Monday when a well-known sell-side analyst initiated coverage of the online betting stock.
In a report to clients out earlier today, Macquarie analyst Chad Beynon initiated coverage of Super Group with an “outperform” rating and a $17 price target, which implies upside of nearly 34% from today’s close at $12.69. His bullish commentary arrives ahead of the operator’s investor day, which is scheduled for Thursday, Sept. 18, and is driven in part by the company’s exposure to Africa.
With 2025E revs up 90%+ since 2021, Africa revs have increased 200%+ and comprise 40% of total,” observes Beynon. “While most is driven from South Africa, SGHC has diversified and is participating in the rising GDPs and digital participation rates of smaller, but high-growth markets, including podium positions in its eight markets, a major differentiator.”
While Africa is a region overlooked by many US investors and the bulk of iGaming/sports betting operators listed hear, Super Group is proving the continent is lucrative. The stock has more than doubled year-to-date despite the operator announcing in July that it’s departing the US iGaming market — news that arrived a year after the company told investors it would leave the US sports betting industry.
Super Group a Rule of 40 Stock
With a market capitalization of $6.36 billion, Super Group is a mid-cap name — a category of stocks that, regardless of industry, often go overlooked by investors.
The combination of being a mid-cap and no longer having exposure to US explains why some market participants gloss over Super Group, but that shouldn’t be the case. Not when the stock has more than doubled and fits the bill as an attractively valued Rule of 40 name, according to Beynon. The Rule of 40 distinction is typically reserved for high-growth software equities.
In the software-as-a-service (SaaS) realm, the Rule of 40 is a financial gauge suggesting that a financially sound, thriving company should have combined revenue growth rate and profit margin of 40% or more.
It’s common for Rule of 40 stocks to be richly valued, but as Beynon points out, trades at just 12x and 10x 2025 and estimated 2026 enterprise value/earnings before interest taxes, depreciation, and amortization (EV/EBITDA) while the digital gaming peer group trades at 20x and 15x, respectively.
iGaming Exposure Helps Super Group Stock
Super Group’s decision to pull out of the US is benefiting investors on another: it allows the company to focus on higher growth iGaming. Internet casinos account feature higher margins than sports betting and account for 80% of Super Group’s business mix, according to Beynon.
The company’s iGaming exposure is pertinent for another reason. That form of wagering is legal in just seven US states and it could be several years before another joins the party, but Africa is more receptive and it has few land-based casinos that represent competition. Plus, Super Group is fundamentally sound.
“Additionally, as of 2Q25, the company has no debt on its balance sheet with consolidated unrestricted cash of $393 million, which we believe creates ample capacity to conduct M&A for inorganic growth and to bolster market share,” concludes Beynon. “Highlighting the company’s free cash flow generation, SGHC also pays a $0.04 quarterly dividend and issued a special dividend in the past.”
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