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Evolution Gaming Group AB (SE:EVO)
:EVO
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Evolution Gaming Group AB
(EVO)
75Outperform
Positive Factors
Revenue Growth
Revenues from regulated markets grew by 19%, providing a positive offset to slower growth in unregulated markets.
Stock Buyback
The announcement of a new €500 million buyback and a record quarter in North America with 19% year-on-year growth are seen as positive indicators.
Valuation
The current valuation at 10x EV/EBITDA is considered attractive compared to the historical average of 22x, suggesting potential for upside.
Negative Factors
Earnings Miss
The headline revenue growth rate of 6.1% constant currency falls 4% below consensus expectations, with a 9% EBITDA miss implication for the year.
Margin Pressure
New guidance indicating a 4% cut to consensus EBITDA expectations highlights pressure from evolving regulations and increased cyberattack costs.
Regulatory Concerns
The UK Gambling Commission's review of EVO’s UK operating licence raises concerns about regulatory challenges.
Evolution Gaming Group AB (EVO) vs. S&P 500 (SPY)
Market Cap
kr144.60B
Dividend Yield4.54%
Average Volume (3M)812.76K
Price to Earnings (P/E)10.1
Beta (1Y)0.86
Revenue Growth10.67%
EPS Growth15.00%
CountrySE
Employees16,368
SectorTechnology
Sector Strength68
IndustryGambling, Resorts & Casinos
Share Statistics
EPS (TTM)67.57
Shares Outstanding211,833,200
10 Day Avg. Volume711,550
30 Day Avg. Volume812,760
Financial Highlights & Ratios
PEG Ratio0.67
Price to Book (P/B)N/A
Price to Sales (P/S)0.00
Price to Cash Flow (P/CF)0.00
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
kr1,110.17Price Target Upside62.64% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering9
Evolution Gaming Group AB Business Overview & Revenue Model
Company DescriptionEvolution Gaming Group AB (EVO) is a leading provider of live casino solutions, specializing in designing, developing, and licensing live dealer gaming systems for online and land-based casino operators. The company is renowned for its high-quality live streaming services and innovative gaming solutions, which include traditional table games like blackjack, roulette, and baccarat, as well as unique game show-style offerings. Evolution Gaming operates in the iGaming sector and partners with numerous online gaming operators worldwide to deliver immersive gaming experiences.
How the Company Makes MoneyEvolution Gaming Group AB generates revenue primarily through licensing its live casino platform and games to online casino operators. The company charges its clients a fixed fee and a percentage of the net revenue generated from their games. This revenue-sharing model incentivizes both Evolution and its clients to maximize player engagement and satisfaction. Additionally, Evolution Gaming invests in developing a wide range of innovative and exclusive gaming content, which helps them attract new clients and retain existing ones. Key partnerships with major online casino brands and a strong presence in regulated markets also contribute significantly to the company's financial performance.
Evolution Gaming Group AB Financial Statement Overview
Summary
Evolution Gaming Group AB exhibits a robust financial position, driven by strong profitability, efficient capital management, and sound financial health. The company has a low debt-to-equity ratio and excellent return on equity, indicating efficient use of shareholder funds. Strong cash flow metrics demonstrate healthy liquidity and operational efficiency.Income Statement
Evolution Gaming Group AB demonstrates excellent profitability and revenue growth. The TTM (Trailing-Twelve-Months) gross profit and net profit margins are robust due to high operational efficiency, with a gross profit margin of 100% and a net profit margin of 59.0%. The revenue growth rate is impressive at 17.2% from 2023 to 2024. EBIT and EBITDA margins are also strong, indicating good cost management and profitability.92
Very Positive
Balance Sheet
The balance sheet of Evolution Gaming Group AB is strong, characterized by a low debt-to-equity ratio of 0.022, reflecting minimal leverage. The return on equity (ROE) is excellent at 29.4%, indicating efficient use of shareholder funds. The equity ratio is solid at 73.5%, showcasing a stable financial structure with a significant portion of assets financed by equity.88
Very Positive
Cash Flow
Cash flow metrics indicate healthy liquidity and operational efficiency. The operating cash flow to net income ratio is 1.11, suggesting strong cash generation relative to profit. Free cash flow has grown steadily, with a free cash flow to net income ratio of 1.00, indicating efficient capital expenditure management and effective cash utilization.90
Very Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 2.06B | 1.80B | 1.46B | 1.07B | 561.13M | Gross Profit |
| 2.11B | 1.80B | 1.46B | 1.09B | 572.25M | EBIT |
| 1.42B | 1.14B | 908.06M | 654.00M | 299.70M | EBITDA |
| 1.59B | 1.20B | 1.01B | 730.94M | 332.26M | Net Income Common Stockholders |
| 1.24B | 1.07B | 843.36M | 605.43M | 284.62M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 787.07M | 985.76M | 532.55M | 421.43M | 221.68M | Total Assets |
| 5.35B | 4.97B | 4.37B | 3.90B | 3.17B | Total Debt |
| 93.66M | 79.46M | 79.55M | 67.81M | 49.97M | Net Debt |
| -693.41M | -906.30M | -453.00M | -353.62M | -171.71M | Total Liabilities |
| 1.37B | 967.27M | 909.09M | 712.12M | 442.94M | Stockholders Equity |
| 3.97B | 4.01B | 3.46B | 3.19B | 2.73B |
| Cash Flow | Free Cash Flow | |||
| 1.16B | 1.07B | 780.53M | 537.30M | 279.17M | Operating Cash Flow |
| 1.30B | 1.17B | 877.47M | 598.89M | 316.05M | Investing Cash Flow |
| -247.97M | -139.36M | -371.60M | -154.95M | 6.82M | Financing Cash Flow |
| -1.24B | -574.50M | -394.20M | -248.52M | -279.91M |
Evolution Gaming Group AB Technical Analysis
Negative
682.60
Price Trends
791.80
Negative
826.45
Negative
913.82
Negative
Market Momentum
-8.64
Positive
29.62
Positive
32.45
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SE:EVO, the sentiment is Negative. The current price of 682.6 is below the 20-day moving average (MA) of 777.99, below the 50-day MA of 791.80, and below the 200-day MA of 913.82, indicating a bearish trend. The MACD of -8.64 indicates Positive momentum. The RSI at 29.62 is Positive, neither overbought nor oversold. The STOCH value of 32.45 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SE:EVO.
Evolution Gaming Group AB Peers Comparison
Overall Rating
UnderperformOutperform
Sector (60)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | kr24.28B | 11.27 | 22.34% | ― | 17.47% | 18.78% | |
75 Outperform | kr144.60B | 10.05 | 4.54% | 10.67% | 15.00% | ||
72 Outperform | $3.14B | 18.27 | 9.13% | ― | -4.66% | -32.21% | |
60 Neutral | $10.94B | 10.58 | -7.08% | 2.98% | 7.52% | -12.04% | |
40 Underperform | $159.17M | ― | -42.79% | ― | -39.52% | -33.31% |
* Technology Sector Average
Performance Comparison
SE:EVO
Evolution Gaming Group AB
682.60
-521.40
-43.31%
SE:KAMBI
Kambi Group
110.10
9.30
9.23%
SE:BETS.B
Betsson AB
175.80
57.99
49.22%
SE:CTM
Catena Media
2.04
-5.50
-72.94%
Evolution Gaming Group AB Earnings Call Summary
Earnings Call Date:Apr 30, 2025
(Q1-2025)
| % Change Since: -18.31%|
Next Earnings Date:Jul 17, 2025
Earnings Call Sentiment Neutral
The call highlighted significant expansion and innovation efforts, particularly in North America and Latin America, and a robust product pipeline. However, these positives were counterbalanced by challenges in Europe and Asia due to regulatory and cyber issues, as well as a slight decline in EBITDA margin and RNG revenue growth.Q1-2025 Updates
Positive Updates
Expansion and Growth Initiatives
Opened a new studio in Romania, with plans to open additional studios in Brazil, Philippines, Michigan, Malta, Colombia, Argentina, New Jersey, and Philadelphia. Demonstrates Evolution's commitment to growth and market share expansion.
New Game Releases and Innovation
Released several new games such as War, Race Track, and Bet Stacker Blackjack. Launched Marble Race, with upcoming releases including Super Color game and Ice Fishing, indicating a strong product pipeline.
North America and LatAm Growth
North America showed strong performance with a 15% year-on-year growth. LatAm exhibited a 9.7% growth year-on-year, despite initial regulatory challenges in Brazil.
Headcount and Recruitment Milestone
Surpassed 22,000 employees for the first time, representing an 8.4% year-on-year growth, driven by major recruitment pushes in key growth regions like Brazil and Philippines.
Negative Updates
Regulatory Challenges in Europe
Ringfencing measures in European markets with low channelization led to a revenue drop. European revenue was flat compared to Q1 2024 and down 6% from the fourth quarter.
Cyber Challenges in Asia
Continued efforts to combat criminal cyber activity in Asia have stabilized revenue but growth remains flat, impacting the overall financial performance.
Soft RNG Revenue Growth
RNG revenues grew by only 3.1% year-on-year, reflecting softer development compared to previous quarters and suggesting room for improvement.
EBITDA Margin Decline
EBITDA decreased by 1.1% year-on-year, with the margin at 65.6%, below the full-year guidance of 66% to 68%, influenced by ringfencing and cyberattack countermeasures.
Company Guidance
In the first quarter of 2025, Evolution reported a net revenue of EUR 520.9 million, reflecting a year-on-year growth of 3.9%. The EBITDA decreased by 1.1% from the previous year, with the margin slightly below the full-year guidance at 65.6%. Despite the challenges posed by ringfencing in regulated markets and cyberattack countermeasures in Asia, the company remains optimistic for the second half of the year. The Live segment revenue was EUR 448.7 million, growing by 4%, while RNG revenues were EUR 72.3 million, showing a softer growth of 3.1%. Evolution also surpassed 22,000 employees, marking an 8.4% year-on-year growth. The company continues to expand its global footprint, opening new studios in Romania, Brazil, and the Philippines, among others, while maintaining a strong product roadmap with over 110 game releases planned for 2025. Evolution's cash flow conversion was robust at 87%, and the company plans to pay a cash dividend of EUR 2.8 per share, totaling EUR 572 million.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.