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UBISOFT Entertainment (FR:UBI)
:UBI
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UBISOFT Entertainment (UBI) AI Stock Analysis

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UBISOFT Entertainment

(LSE:UBI)

Rating:50Neutral
Price Target:
UBISOFT Entertainment is showing recovery in financial performance with revenue growth and profitability improvements, but significant challenges remain in terms of cash flow and valuation. The technical analysis indicates a bearish trend, and the lack of earnings and dividend yield highlight valuation concerns. The stock's overall score reflects a cautious stance due to these mixed signals.
Positive Factors
Financial Strategy
The Tencent-backed subsidiary transaction is set to fully deleverage Ubisoft and strengthen liquidity, providing strategic flexibility amid its ongoing portfolio transformation.
Game Launch Success
The launch of Assassin’s Creed Shadows exceeded expectations with strong engagement and monetization, offering a potential multi-quarter tailwind.
Negative Factors
Execution Risk
Execution risk remains elevated given uncertainty around leadership, capital control, and long-term governance in the Tencent transaction.
Financial Challenges
The near-term content gaps and breakeven FY26 profitability outlook present real challenges, with no clear evidence yet that structural cost cuts or franchise expansion will deliver meaningful long-term benefit.

UBISOFT Entertainment (UBI) vs. iShares MSCI France ETF (EWQ)

UBISOFT Entertainment Business Overview & Revenue Model

Company DescriptionUbisoft Entertainment SA produce, publishes, and distributes video games for consoles, PC, smartphones, and tablets in both physical and digital formats in Europe, North America, and internationally. The company designs and develops software, including scenarios, animation, gameplay, layouts, and game rules, as well as develops design tools and game engines. It is also involved in the development in the area of online and mobile gaming; and film business. The company was incorporated in 1986 and is headquartered in Saint-Mandé, France.
How the Company Makes MoneyUbisoft generates revenue primarily through the sale of video games and related content. This includes income from physical and digital game sales, in-game purchases, downloadable content (DLC), and subscription services. The company leverages its popular franchises to create long-lasting revenue streams by continually releasing new titles, expansions, and updates to engage players. Additionally, Ubisoft benefits from its partnerships with hardware manufacturers, digital distribution platforms, and other media companies which further enhance its market reach and profitability. Key revenue streams also include licensing agreements and merchandise sales related to its game franchises.

UBISOFT Entertainment Financial Statement Overview

Summary
UBISOFT Entertainment demonstrates a recovery in revenue and profitability, with strong gross margins and reasonable balance sheet leverage. However, challenges remain with negative free cash flow, which could impact future growth and investment capabilities. The company is on a positive trajectory but needs to address cash flow issues to ensure sustainable growth.
Income Statement
65
Positive
UBISOFT Entertainment shows improving revenue trends with a significant increase of 26.83% from the previous year. The gross profit margin is strong at 91.13%, indicating effective cost management. However, the net profit margin is relatively low at 6.86%, suggesting high operating costs. The company has managed to turn around from a net loss in the previous year to profitability, which is a positive sign.
Balance Sheet
72
Positive
The company's balance sheet is relatively healthy, with a debt-to-equity ratio of 1.34, which is manageable. Return on equity (ROE) stands at 8.41%, indicating reasonable returns on shareholder investment. The equity ratio is 36.64%, showing a balanced capital structure with moderate leverage. However, the increase in debt levels compared to the previous year poses a potential risk.
Cash Flow
55
Neutral
Cash flow analysis reveals challenges with a declining free cash flow, currently negative at -€465.6 million. The operating cash flow to net income ratio is strong at 3.41, indicating efficient cash generation from operations. However, the negative free cash flow to net income ratio highlights issues in covering capital expenditures, reflecting potential liquidity concerns.
BreakdownMar 2024Mar 2023Mar 2022Mar 2021Mar 2020
Income Statement
Total Revenue2.30B1.81B2.13B2.22B1.59B
Gross Profit2.10B370.10M1.27B1.35B822.74M
EBITDA1.11B667.00M932.50M948.10M460.19M
Net Income157.80M-494.20M79.10M103.10M-125.62M
Balance Sheet
Total Assets5.12B4.67B4.96B4.88B3.60B
Cash, Cash Equivalents and Short-Term Investments1.21B1.49B1.45B1.87B1.08B
Total Debt2.51B2.46B2.07B2.09B1.42B
Total Liabilities3.24B3.19B3.15B3.22B2.28B
Stockholders Equity1.88B1.48B1.81B1.66B1.31B
Cash Flow
Free Cash Flow-465.60M-380.70M-240.90M107.90M-155.78M
Operating Cash Flow537.60M689.60M705.70M957.90M600.33M
Investing Cash Flow-1.01B-1.11B-1.01B-868.20M-904.87M
Financing Cash Flow204.70M543.60M98.60M463.80M431.57M

UBISOFT Entertainment Technical Analysis

Technical Analysis Sentiment
Neutral
Last Price9.47
Price Trends
50DMA
9.67
Negative
100DMA
10.50
Negative
200DMA
11.49
Negative
Market Momentum
MACD
-0.05
Negative
RSI
51.24
Neutral
STOCH
71.17
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FR:UBI, the sentiment is Neutral. The current price of 9.47 is above the 20-day moving average (MA) of 9.31, below the 50-day MA of 9.67, and below the 200-day MA of 11.49, indicating a neutral trend. The MACD of -0.05 indicates Negative momentum. The RSI at 51.24 is Neutral, neither overbought nor oversold. The STOCH value of 71.17 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for FR:UBI.

UBISOFT Entertainment Peers Comparison

Overall Rating
UnderperformOutperform
Sector (50)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
FRUBI
50
Neutral
€1.26B-8.66%11.34%83.95%
50
Neutral
C$3.14B2.03-63.57%2.91%4.49%-6.15%
€71.97M-490.20%
DE0HF
€203.49M9.9813.73%
DEGUL
€70.37M62.061.17%
DERFV
€12.16M-74.48%
DE4AW
€89.28M3.05-0.49%
* Technology Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
FR:UBI
UBISOFT Entertainment
9.31
-10.21
-52.30%
GB:0KUV
Atari SA
0.15
0.04
36.36%
DE:0HF
Focus Home Interactive SA
23.65
11.69
97.74%
DE:GUL
Guillemot Corp. SA
4.89
-1.33
-21.38%
DE:RFV
Don't Nod Entertainment SA
0.89
-0.90
-50.28%
DE:4AW
Nacon SASU
0.81
-0.38
-31.93%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

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.Date of analysis: Apr 22, 2025