Jefferies analyst James Wheatcroft maintained a Buy rating on Evolution Gaming Group AB (EVO – Research Report) today and set a price target of SEK1,760.00.
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James Wheatcroft has given his Buy rating due to a combination of factors that highlight both challenges and opportunities for Evolution Gaming Group AB. Despite a slowdown in revenue growth across all regions, particularly in Europe and Asia, the company has shown resilience with a 19% increase in revenues from regulated markets. This growth in regulated markets is expected to help offset the slower growth rates in other areas.
Additionally, the company’s proactive measures to adapt to regulatory changes in Europe and its strategic initiatives, such as the release of 110 new games and the opening of new studios, demonstrate a commitment to long-term growth. The current valuation at 10x EV/EBITDA for FY25E, compared to a historical average of 20x, suggests that the market has already priced in the regulatory challenges, presenting a potential buying opportunity. Furthermore, the reiterated EBITDA margin guidance of 66%-68% and a 7.4% free cash flow yield add to the positive outlook for the stock.
In another report released on April 24, Citi also maintained a Buy rating on the stock with a SEK1,495.00 price target.