This FTSE 250 stock has jumped 200%+ since the market crash. Would I buy now?

Gambling stocks — including FTSE 250 bookmaker William Hill (LSE: WMH) — were among the hardest hit as markets crashed in March. At the time, this all seemed fairly logical. With most sporting events cancelled, the outlook for the industry looked truly dire. 

In only a couple of months, however, these stocks have bounced back strongly. Indeed, those who had the courage to buy William Hill back in the middle of March will have seen their money grow an incredible 200% since.

With lockdowns now beginning to ease around the world, is there still time to get on board? Let’s start by taking a quick look at today’s trading update.

Game off

All things considered, this morning’s statement could have been a lot worse.

While a flagging retail arm meant that total revenue declined 5% in the 10 weeks before the coronavirus hit, the company was still making great strides online over this period. Overseas growth, particularly in Spain, Italy and the potentially-very-lucrative US market was strong in this part of the business. 

From 11 March to 28 April, however, net revenue tumbled 57%. That fall was partly due to the closure of the company’s entire retail estate as a result of the pandemic.

It wasn’t all bad. Encouragingly, the FTSE 250 member said today that online activity had not declined as much as expected. Punters were continuing to bet on sports like table tennis and football in emerging markets. Others were switching to games offered by the company. Interestingly, the introduction of a ban on customers using credit cards had not led to a material drop in activity.

William Hill has also done its bit to mitigate the impact of the coronavirus on its finances. Costs have been cut and dividend payments have been suspended. Having come to an agreement with its lenders, the FTSE 250 stock said that it finished the trading period “in a strong financial position with significant headroom“. 

FTSE 250 recovery play?

Shares in William Hill were racing ahead of the pack again in early trading, This suggests that investors believe the company still offers value. Are they right?

Well, as the company itself noted, there are signs that the sporting calendar could be about to get back on track. Football in Germany, for example, is expected to resume this month, albeit behind closed doors. Horse-racing is likely to return to the UK in June, having already restarted in France.

For its part, Hill said that it was currently planning to ‘power up’ its operations through a “staged opening of the UK retail estate in the second half of 2020″. Notwithstanding this, it did say that it would be withdrawing all future guidance on earnings.

With the shares still around 45% lower than where they were trading at the start of 2020, I can’t help but feel there’s still some money to be made. This is especially true given that the company is nicely positioned to benefit from the huge growth of gambling in the US as rules are gradually relaxed. 

I certainly wouldn’t go ‘all-in’ on William Hill though. After all, no one knows just how successful the lifting of restrictions will be. News of a second wave will almost certainly obliterate the gains made since March as events get postponed again. It’s a bet worth taking, in my view, but I’d be inclined to build a position gradually.