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

• Market Cap: €176.89M
• Dividend Yield: N/A
• Average Volume (3M): 23.69K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.40
• Revenue Growth: 8.19%
• EPS Growth: 58.05%
• Country: IT
• Employees: 286
• Sector: Technology
• Sector Strength: 65
• Industry: Electronic Gaming & Multimedia
• EPS (TTM): -0.10
• Shares Outstanding: 14,265,037
• 10 Day Avg. Volume: 23,391
• 30 Day Avg. Volume: 23,689
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.00
• Price to Cash Flow (P/CF): 0.00
• P/FCF Ratio: 0.00
• 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: €21.00
• Price Target Upside: 71.85% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1

Digital Bros S.p.A. faces significant challenges, primarily due to declining revenues and negative profitability, as reflected in its financial performance score. Despite a robust equity position and zero debt, these strengths are overshadowed by operational inefficiencies and weak cash flow growth. Technical indicators suggest caution, with overbought conditions potentially limiting short-term upside. Valuation metrics indicate an overvalued stock given the negative earnings. Overall, strategic improvements are needed to enhance future prospects.

Positive Factors

Cost Structure Improvements

Cost structure adjustment measures have paid off, with a 27% reduction in operating costs for the quarter.

Game Release Anticipation

The group owns one of the most anticipated titles of the year, Wuchang Fallen Feathers, which is expected to drastically change the group’s financial profile.

Microsoft Sponsorship

Wuchang is set to be 'sponsored' by Microsoft, offering it Day One to its subscribers, significantly reducing the risk for Digital Bros.

Negative Factors

EBITDA Margin Pressure

EBITDA margin is expected to decrease to 31.7% in FY25 from 35.8% largely due to a decrease in the margin from Premium Games.

Future Revenue Challenges

Revenue is expected to decrease in FY25 driven by ongoing challenges in the videogames industry and the company's continued portfolio rationalization process.

Revenue Decline

Revenue for the semester stands at €43.0M, showing a decrease of 9%.

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

Company Description

Digital Bros S.p.A. is an international digital entertainment company based in Italy, primarily focused on the development, publishing, and distribution of video games. It operates in various sectors of the gaming industry, including mobile, console, and PC gaming. The company is known for its strong portfolio of games and its commitment to delivering high-quality entertainment experiences to a global audience.

How the Company Makes Money

Digital Bros S.p.A. generates revenue through multiple streams in the gaming industry. The primary source of income is the sale of video games, which includes both physical and digital distribution. The company also engages in publishing agreements, where it partners with game developers to bring their products to market, earning revenue through distribution rights and royalties. Additionally, Digital Bros makes money from in-game purchases and downloadable content, which enhance the gaming experience for users and provide ongoing income beyond initial game sales. Key partnerships with other gaming companies and platforms also contribute to its financial success, enabling broader reach and access to diverse markets.

Digital Bros S.p.A. Financial Statement Overview

Summary

Income Statement

Balance Sheet

Cash Flow

Breakdown
Jun 2024	Jun 2023	Jun 2022	Jun 2021	Jun 2020
Income Statement		Total Revenue
117.93M	117.93M	132.24M	149.18M	136.68M
	Gross Profit
79.67M	82.23M	86.78M	89.45M	56.95M
	EBIT
6.17M	19.33M	35.96M	30.55M	20.05M
	EBITDA
33.67M	43.45M	54.13M	59.96M	34.68M
	Net Income Common Stockholders
-2.21M	9.68M	28.55M	32.02M	14.97M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
22.22M	20.75M	11.29M	35.51M	8.53M
	Total Assets
230.81M	265.19M	226.31M	202.02M	155.65M
	Total Debt
45.63M	59.38M	25.25M	10.97M	12.07M
	Net Debt
33.64M	49.97M	14.29M	-24.54M	3.54M
	Total Liabilities
103.12M	121.47M	88.99M	90.22M	75.72M
	Stockholders Equity
131.00M	142.34M	135.90M	110.90M	78.95M
Cash Flow		Free Cash Flow
13.16M	-36.90M	-35.87M	43.49M	19.28M
	Operating Cash Flow
30.75M	37.53M	21.53M	99.12M	53.80M
	Investing Cash Flow
-14.78M	-78.33M	-53.72M	-61.34M	-35.73M
	Financing Cash Flow
-13.40M	39.24M	7.42M	-10.80M	-14.32M

Digital Bros S.p.A. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 12.22
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IT:DIB, the sentiment is Positive. The current price of 12.22 is above the 20-day moving average (MA) of 10.24, above the 50-day MA of 10.97, and above the 200-day MA of 10.34, indicating a bullish trend. The MACD of 0.46 indicates Negative momentum. The RSI at 74.73 is Negative, neither overbought nor oversold. The STOCH value of 95.16 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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
TXT	72 Outperform	€389.94M	27.01	12.06%	0.76%	35.72%	0.10%
ELN	70 Outperform	€727.19M	14.12	16.98%	2.21%	-18.26%	6.79%
Sector *	60 Neutral	$10.77B	10.41	-6.71%	2.99%	7.69%	-13.12%
DIB	57 Neutral	€176.89M	―	-1.75%	―	8.19%	58.05%