Digital Bros S.p.A. (DIB) AI Stock Analysis

• Market Cap: €159.48M
• Dividend Yield: N/A
• Average Volume (3M): 36.06K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.49
• Revenue Growth: -20.62%
• EPS Growth: -396.13%
• Country: IT
• Employees: 286
• Sector: Technology
• Sector Strength: 88
• Industry: Electronic Gaming & Multimedia
• EPS (TTM): 0.10
• Shares Outstanding: 14,265,037
• 10 Day Avg. Volume: 46,535
• 30 Day Avg. Volume: 36,058
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: €12.50
• Price Target Upside: 11.81% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 1

• Rating: 52 Neutral
• Price Target: €12.50 ▲(11.81% Upside)

Digital Bros S.p.A. faces challenges with negative profitability and valuation concerns, as reflected in a low P/E ratio and negative earnings. While the company shows strong operational efficiency and cash flow management, these are offset by declining revenues and a bearish technical outlook. The combination of these factors results in a cautious overall stock score.

Positive Factors

Negative Factors

Digital Bros S.p.A. Business Overview & Revenue Model

Company Description

Digital Bros S.p.A. develops, publishes, distributes, and markets video games in Europe, the Americas, and internationally. It operates through Premium Games, Free to Play, Italian Distribution, and Other activities segment. The Premium Games segment acquires and distributes video games content rights on digital marketplaces, such as Steam, Sony PlayStation Network, Microsoft Xbox Live, Epic Game Store, etc., as well as through an international sales network; and publishes video games under 505 Games brand name. The Free to Play segment develops and publishes video games and applications that are available free of charge on digital marketplaces under the 505 Games Mobile brand name. The Italian Distribution segment purchases and distributes video games under the Halifax brand; and Yu-Gi-Oh! trading card games through newsstand distribution channel in Italy. The Other Activities segment organizes video game training and professional update courses. Digital Bros S.p.A. was founded in 1989 and is based in Milan, Italy.

How the Company Makes Money

Digital Bros S.p.A. generates revenue through multiple channels. The primary source of income is the sale of video games, which includes both physical and digital formats. The company develops and publishes its own titles while also distributing third-party games. Digital Bros benefits from digital sales through platforms like Steam, PlayStation Network, and Xbox Live, which offer high-margin opportunities due to the absence of physical production costs. Additionally, the company engages in licensing agreements and partnerships with other game developers and publishers, further augmenting its revenue streams. The company also monetizes its games through in-game purchases and downloadable content (DLC), which enhance the gaming experience and offer additional revenue potential.

Digital Bros S.p.A. Financial Statement Overview

Summary

Digital Bros S.p.A. shows significant challenges in profitability with a negative net profit margin and declining revenues. However, strong cost management and cash flow generation provide a buffer, and the solid equity position indicates financial stability.

Income Statement

Digital Bros S.p.A. shows a declining revenue trend with a 7.94% decrease in revenue from the previous year. The Gross Profit Margin for TTM is 67.21%, indicating strong cost management in production. However, the Net Profit Margin is negative at -1.48%, highlighting profitability challenges. The EBIT Margin is modest at 3.72%, and the EBITDA Margin is healthier at 37.45%, reflecting good operational efficiency but pressure on net profitability.

Balance Sheet

The company maintains a solid equity position with a Debt-to-Equity Ratio of 0.25, indicating conservative gearing. The Return on Equity (ROE) is negative at -1.31% for TTM, which is concerning for shareholder returns. The Equity Ratio stands at 63.18%, demonstrating a stable financial structure with a significant portion of assets financed by equity.

Cash Flow

Cash flow analysis shows a robust Operating Cash Flow to Net Income Ratio of -27.62, indicating strong cash generation despite negative net income. The Free Cash Flow has grown by 74.92% compared to the previous period, suggesting improved capital management. However, the Free Cash Flow to Net Income Ratio is -14.32, reflecting the impact of negative earnings on free cash flow performance.

Breakdown	TTM	Dec 2023	Dec 2022	Dec 2021	Dec 2020	Dec 2019
Income Statement
Total Revenue	108.58M	117.93M	117.93M	132.24M	149.18M	136.68M
Gross Profit	72.96M	79.67M	82.23M	86.78M	89.45M	56.95M
EBITDA	40.64M	33.67M	43.45M	54.13M	59.96M	34.68M
Net Income	-1.61M	-2.21M	9.68M	28.55M	32.02M	14.97M
Balance Sheet
Total Assets	193.70M	230.81M	265.19M	226.31M	202.02M	155.65M
Cash, Cash Equivalents and Short-Term Investments	6.62M	22.22M	20.75M	11.29M	35.51M	8.53M
Total Debt	30.90M	45.63M	59.38M	25.25M	10.97M	12.07M
Total Liabilities	70.56M	103.12M	121.47M	88.99M	90.22M	75.72M
Stockholders Equity	122.35M	131.00M	142.34M	135.90M	110.90M	78.95M
Cash Flow
Free Cash Flow	23.02M	13.16M	-36.90M	-35.87M	43.49M	19.28M
Operating Cash Flow	44.41M	30.75M	37.53M	21.53M	99.12M	53.80M
Investing Cash Flow	-24.03M	-14.78M	-78.33M	-53.72M	-61.34M	-35.73M
Financing Cash Flow	-18.88M	-13.40M	39.24M	7.42M	-10.80M	-14.32M

Digital Bros S.p.A. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 11.18
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Positive
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IT:DIB, the sentiment is Negative. The current price of 11.18 is below the 20-day moving average (MA) of 12.16, below the 50-day MA of 12.73, and below the 200-day MA of 12.58, indicating a bearish trend. The MACD of -0.26 indicates Positive momentum. The RSI at 27.27 is Positive, neither overbought nor oversold. The STOCH value of 10.11 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for IT:DIB.

Digital Bros S.p.A. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
DGV	81 Outperform	€306.47M	16.26	15.70%	2.66%	-24.28%	-57.55%
IOT	57 Neutral	€412.23M	-26.43	-7.74%	―	-3.47%	-947.32%
CY4	54 Neutral	€121.39M	-18.10	-7.47%	―	29.64%	62.10%
DIB	52 Neutral	€159.48M	―	-8.92%	―	-20.62%	-396.13%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%

Digital Bros S.p.A. Corporate Events

Digital Bros Group’s Wuchang: Fallen Feathers Tops Steam Rankings Amid Technical Challenges

Digital Bros Group announced the launch of its new video game, Wuchang: Fallen Feathers, which has already achieved first place in global Steam rankings and attracted over 130,000 simultaneous players. Despite its initial success, the game has faced technical issues on the Steam platform, prompting the company and its partners to work on resolving these problems swiftly, with a corrective update expected soon. The company views the game as a valuable project with potential for significant fiscal and strategic impact.

The most recent analyst rating on (IT:DIB) stock is a Buy with a EUR22.00 price target. To see the full list of analyst forecasts on Digital Bros S.p.A. stock, see the IT:DIB Stock Forecast page.

Digital Bros Group Revises FY 2024-2025 Outlook Amid Market Challenges

Digital Bros Group has updated its financial outlook for the fiscal year ending June 30, 2025, projecting a decline in EBIT due to the underperformance of its new video game, Blades of Fire, and higher-than-expected write-offs. Despite these challenges, the company expects its net financial debt to improve significantly, falling below Euro 20 million, which is better than previous estimates.

The most recent analyst rating on (IT:DIB) stock is a Buy with a EUR22.00 price target. To see the full list of analyst forecasts on Digital Bros S.p.A. stock, see the IT:DIB Stock Forecast page.

Digital Bros Gains Influence Over Starbreeze AB with Board Election

Digital Bros Group has announced that it has acquired significant influence over its Swedish subsidiary, Starbreeze AB, following the election of its CFO, Stefano Salbe, to Starbreeze’s Board of Directors. This development allows Digital Bros to consolidate Starbreeze using the equity method, which is expected to impact the company’s financial statements and decision-making processes, potentially enhancing its strategic position in the video game industry.

The most recent analyst rating on (IT:DIB) stock is a Buy with a EUR22.00 price target. To see the full list of analyst forecasts on Digital Bros S.p.A. stock, see the IT:DIB Stock Forecast page.

Digital Bros Reports Improved Operating Margin Amid Revenue Decline

Digital Bros S.p.A. reported its financial results for the first nine months of the 2024-2025 fiscal year, showing a decline in net revenues by 12.3% to 66.4 million Euros, while achieving a positive operating margin of 2.3 million Euros, a significant improvement from the previous year. Despite the declining revenues, the company has managed to maintain a stable operating margin by focusing on high-margin video games and discontinuing less profitable projects, which has led to a reduced net loss and improved financial debt position.

The most recent analyst rating on (IT:DIB) stock is a Buy with a EUR22.00 price target. To see the full list of analyst forecasts on Digital Bros S.p.A. stock, see the IT:DIB Stock Forecast page.