Evolution Gaming Group AB (EVVTY) AI Stock Analysis

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Evolution Gaming Group AB

(OTC:EVVTY)

85Outperform

Evolution Gaming Group AB's stock is rated highly due to its strong financial performance characterized by excellent profitability, effective cost management, and robust cash flow generation. The stock's technical indicators show positive momentum, though caution is advised due to signs of overbought conditions. The valuation metrics, including a reasonable P/E ratio and attractive dividend yield, further support a strong overall score.

Evolution Gaming Group AB (EVVTY) vs. S&P 500 (SPY)

Market Cap

$17.97B

Dividend Yield2.29%

Average Volume (3M)3.38K

Price to Earnings (P/E)13.2

Beta (1Y)0.89

Revenue Growth14.76%

EPS Growth18.56%

CountryUS

Employees19,794

SectorConsumer Cyclical

Sector Strength64

IndustryGambling, Resorts & Casinos

Share Statistics

EPS (TTM)6.43

Shares Outstanding211,833,200

10 Day Avg. Volume0

30 Day Avg. Volume3,385

Financial Highlights & Ratios

PEG Ratio0.71

Price to Book (P/B)N/A

Price to Sales (P/S)18.47

Price to Cash Flow (P/CF)N/A

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 TargetN/A

Price Target UpsideN/A

Rating ConsensusN/A

Number of Analyst Covering0

Evolution Gaming Group AB Business Overview & Revenue Model

Company DescriptionEvolution AB (publ) develops, produces, markets, and licenses live casino and slots solutions to gaming operators primarily in Europe and the United States. The company runs the game from a casino gaming table, which is streamed in real time and end users make betting decisions on their devices, such as computers, smartphones, tablets, etc. Its portfolio of online live table games primarily includes Live Roulette, Blackjack, Baccarat, Super Sic Bo, Dragon Tiger, Craps, Live Casino Hold'em, Three Card Poker, and Ultimate Texas Hold'em; and operates approximately 1000 tables. The company was formerly known as Evolution Gaming Group AB (publ). Evolution AB (publ) was founded in 2006 and is headquartered in Stockholm, Sweden.

How the Company Makes MoneyEvolution Gaming Group AB generates revenue primarily through licensing agreements with online gaming operators. These agreements typically involve a revenue-sharing model where Evolution receives a percentage of the operators' takings or a fixed fee per user. The company also earns money through service fees for its comprehensive suite of products and solutions, including bespoke studio environments and dedicated tables tailored to the needs of its clients. Additionally, Evolution benefits from strategic partnerships and acquisitions that expand its product offerings and market reach, further contributing to its earnings.

Evolution Gaming Group AB Financial Statement Overview

Summary

Evolution Gaming Group AB demonstrates strong financial performance with excellent profitability, effective cost management, and robust cash flow generation. The company's low leverage and high equity ratio provide financial stability, while impressive growth rates reflect its competitive position in the industry. The financial statements indicate a well-managed company with a strong foundation for sustainable growth.

Income Statement

Very Positive

Evolution Gaming Group AB has shown a robust financial performance with strong margin metrics across the board. The Gross Profit Margin remains at an exceptional level as Total Revenue equals Gross Profit, indicating effective cost management. The Net Profit Margin is also high at 60.3%, reflecting efficient expense control. Revenue Growth Rate is impressive at 14.7% for 2024, showcasing consistent expansion. Both EBIT and EBITDA margins are solid at 68.8% and 68.4%, respectively, demonstrating strong operational efficiency.

Balance Sheet

Very Positive

The company's balance sheet is healthy, with a low Debt-to-Equity Ratio of 0.023, indicating minimal leverage and financial stability. The Return on Equity is impressive at 31.3%, highlighting effective use of equity capital to generate profits. The Equity Ratio stands at 74.3%, underscoring a strong equity base relative to total assets, which enhances financial resilience.

Cash Flow

Very Positive

Cash flow metrics are strong, with a Free Cash Flow Growth Rate of 8.4% from 2023 to 2024, indicating robust cash generation. The Operating Cash Flow to Net Income Ratio is 1.05, showing that operating cash flows are in line with net income, which is a positive indicator of cash earnings quality. The Free Cash Flow to Net Income Ratio is also healthy at 0.94, supporting the company's ability to generate free cash flow relative to its net income.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
2.06B	1.80B	1.46B	1.07B	561.13M
	Gross Profit
2.06B	1.80B	936.13M	1.09B	308.37M
	EBIT
1.42B	1.14B	908.06M	654.00M	299.70M
	EBITDA
1.41B	1.28B	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
801.47M	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
-707.81M	-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

Technical Analysis Sentiment

Positive

Last Price85.24

Price Trends

50DMA

78.83

Positive

100DMA

79.15

Positive

200DMA

87.89

Negative

Market Momentum

MACD

2.28

Negative

RSI

64.81

Neutral

STOCH

83.44

Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For EVVTY, the sentiment is Positive. The current price of 85.24 is above the 20-day moving average (MA) of 79.55, above the 50-day MA of 78.83, and below the 200-day MA of 87.89, indicating a neutral trend. The MACD of 2.28 indicates Negative momentum. The RSI at 64.81 is Neutral, neither overbought nor oversold. The STOCH value of 83.44 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for EVVTY.

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
EVVTY	85 Outperform	$17.97B	13.24	31.51%	2.29%	14.76%	18.56%
IGT	74 Outperform	$3.31B	9.57	8.08%	4.90%	-22.16%	123.24%
LNW	68 Neutral	$7.13B	22.90	47.97%	―	9.82%	109.44%
Sector *	60 Neutral	$6.85B	11.57	3.09%	4.18%	2.37%	-21.38%
DKNG	58 Neutral	$30.56B	―	-54.81%	―	30.07%	39.93%

* Consumer Cyclical Sector Average

Performance Comparison

EVVTY

Evolution Gaming Group AB

85.24

-28.21

-24.87%

IGT

International Game Technology

16.37

-3.10

-15.92%

LNW

Light & Wonder

84.39

-6.92

-7.58%

GB:FLTR

Flutter Entertainment PLC

17,270.00

2,335.00

15.63%

DKNG

DraftKings

33.79

-9.34

-21.66%

CDRO

Codere Online

7.17

0.39

5.75%

Evolution Gaming Group AB Earnings Call Summary

Earnings Call Date: Jan 30, 2025 | % Change Since: 6.51% | Next Earnings Date: Apr 30, 2025

Earnings Call Sentiment Neutral

The earnings call reflected a balanced outlook. While Evolution made progress with new studio launches and expansion in North America, challenges such as reduced capacity in Georgia and increased cyberattacks in Asia negatively impacted performance.

Highlights

New Studio Launches and Game Releases

Evolution successfully launched new studios in Colombia and the Czech Republic, and introduced several new games, including Lightning Storm and Crazy Coin Flip, which received positive player feedback.

North American Expansion

Evolution expanded its Live Casino product portfolio in North America, adding new games and signing a partnership with Atlantic Lottery to cover all of Canada, resulting in an 18% growth in the region.

RNG Revenue Growth

RNG revenues grew by 8.5% year-on-year, with significant contributions from improvements in game releases and the integration of the One Stop Shop (OSS) platform.

Lowlights

Operational Challenges in Georgia

Due to strikes and illegal actions by the union, Evolution's operations in Georgia were disrupted, resulting in a reduced operational capacity of 60%.

Increased Cyberattacks in Asia

There was a significant increase in cyberattacks against Evolution's Asian video distribution, negatively impacting revenue.

Adjusted EBITDA Margin Below Expectations

The adjusted EBITDA margin was 68.5%, slightly lower than expected, influenced by disruptions in Georgia and cyberattacks.

Company Guidance

During the Q3 2024 earnings call, Evolution provided several key metrics and insights regarding their financial and operational performance. The company reported a total operating revenue of €579 million, including net operating revenue of €519 million, reflecting a year-on-year growth of approximately 15%. Adjusted EBITDA margin was recorded at 68.5% for the quarter. The Live Casino segment contributed €447 million in revenue, marking a 15.8% increase, while RNG revenue grew by 8.5% to reach €72.5 million. Despite facing challenges such as operational disruptions in Georgia and increased cyberattacks in Asia, Evolution continued to expand its footprint by launching new studios in Colombia and the Czech Republic. The company remains focused on its growth strategy, with upcoming projects in Brazil and the Philippines, and plans to continue enhancing its game portfolio. Additionally, Evolution highlighted the impact of cyberattacks on Asian operations and addressed the effects of reduced capacity in Georgia, operating at 60% capacity due to strikes. Looking forward, the company aims to maintain margins around current levels for the remainder of the year, with a full-year EBITDA margin slightly below the initial 69% to 71% range set at the start of 2024.

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.