Playtika Holding Corp.'s stock experienced a 5.18% plummet in the pre-market session on Friday. The decline came amidst concerns over the company's profitability outlook and analyst downgrades.
According to the earnings call transcript, Playtika acknowledged that its revenue mix is shifting towards lower-margin games, posing a threat to its profitability. The company reported a 9% decline in annual credit adjusted EBITDA and a decrease in net income margin from 9.2% to 6.4% compared to the previous year.
Furthermore, Playtika received analyst downgrades from Baird and Morgan Stanley. Baird downgraded the stock to Neutral from Outperform, citing a cautious outlook for the mobile gaming company amidst challenges and a strategic transition. Morgan Stanley reiterated its Hold rating, reflecting the uncertainties surrounding Playtika's performance.