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

• Market Cap: €139.94M
• Dividend Yield: N/A
• Average Volume (3M): 48.35K
• Price to Earnings (P/E): 8.6
• Beta (1Y): 0.47
• Revenue Growth: -1.36%
• EPS Growth: -91.72%
• Country: IT
• Employees: 286
• Sector: Communication Services
• Sector Strength: 97
• Industry: Electronic Gaming & Multimedia
• EPS (TTM): N/A
• Shares Outstanding: 14,265,037
• 10 Day Avg. Volume: 53,299
• 30 Day Avg. Volume: 48,354
• PEG Ratio: -0.05
• Price to Book (P/B): 1.90
• Price to Sales (P/S): 2.31
• P/FCF Ratio: 6.66
• 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: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): 0.91
• Revenue Forecast (FY): €125.49M

• Rating: 66 Neutral
• Price Target: €10.50 ▼(-20.81% Downside)
• Action: Reiterated Date: 12/11/25
• Date: Action: Reiterated 12/11/25

Digital Bros S.p.A. shows strong revenue growth and cash flow generation, which are key strengths. The technical indicators suggest a positive price trend, adding to the stock's attractiveness. However, profitability challenges and a negative P/E ratio weigh down the overall score. Improving profitability will be essential for enhancing the stock's valuation and overall appeal.

Positive Factors

Free cash flow growth

A very large FCF growth rate indicates the business is generating surplus cash from operations that can sustainably fund game development, marketing, IP investments and M&A without heavy reliance on external financing. This strengthens strategic optionality over the medium term.

Conservative leverage

Low leverage reduces financial risk and interest burden, allowing the company to withstand cyclical revenues in gaming. It preserves capital flexibility for investing in new IP, funding releases, and absorbing development delays without pressuring the balance sheet.

High gross margin & revenue growth

Robust top-line growth combined with a ~52% gross margin reflects scalable digital publishing economics and pricing power. This structural margin headroom supports reinvestment in studios and live-ops while offering potential for future operating leverage as fixed costs are spread.

Negative Factors

Negative net profit margin

A persistent negative net margin means the company is not converting its gross margins into bottom-line profits after operating and non‑operating costs. Long-term unprofitability can deplete equity, force financing, and limit the ability to self-fund growth or pay dividends.

Negative return on equity

Negative ROE indicates deployed capital is destroying shareholder value rather than earning returns above cost of capital. Over time this undermines investor confidence and can constrain access to external capital or make acquisitions and studio investments harder to justify.

Weak cash conversion quality

A low OCF-to-net-income ratio suggests earnings contain non-cash items or working capital swings, reducing earnings quality. Even with strong FCF growth, inconsistent cash conversion raises risk that profits may not reliably fund dev cycles or cover fixed costs during revenue slowdowns.

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

Company Description

Digital Bros S.p.A. develops, publishes, distributes, and markets video games in Europe, the Americas, and internationally. It operates through Premium Games, Free to Play, Italian Distribution, and Other activities segment. The Premium Games segment acquires and distributes video games content rights on digital marketplaces, such as Steam, Sony PlayStation Network, Microsoft Xbox Live, Epic Game Store, etc., as well as through an international sales network; and publishes video games under 505 Games brand name. The Free to Play segment develops and publishes video games and applications that are available free of charge on digital marketplaces under the 505 Games Mobile brand name. The Italian Distribution segment purchases and distributes video games under the Halifax brand; and Yu-Gi-Oh! trading card games through newsstand distribution channel in Italy. The Other Activities segment organizes video game training and professional update courses. Digital Bros S.p.A. was founded in 1989 and is based in Milan, Italy.

How the Company Makes Money

Digital Bros makes money mainly by publishing and selling video games (physical and, predominantly, digital) on PC and console platforms. Key revenue streams include: (1) game sales revenue from titles it publishes under its labels, earned via digital storefronts and retail channels; (2) ongoing monetization of released games through downloadable content (DLC), expansions, and other add-on content where applicable; (3) licensing and IP-related income, where the company monetizes game intellectual property via distribution rights or other licensing arrangements; and (4) revenue earned through partnerships with platform holders, digital storefront operators, and external development studios—where Digital Bros typically funds, markets, distributes, and monetizes titles while sharing proceeds with development partners according to contract terms. More granular breakdowns by title, geography, or exact partner economics are null.

Digital Bros S.p.A. Financial Statement Overview

Summary

Digital Bros S.p.A. demonstrates strong revenue growth and cash flow generation, which are positive indicators for future performance. However, the company faces profitability challenges, as evidenced by negative net profit margins and return on equity. The balance sheet is stable with low leverage, but improving profitability will be crucial for enhancing overall financial health.

Income Statement

The company shows a strong revenue growth rate of 25.61% in the TTM period, indicating a positive trajectory. However, the net profit margin is negative at -11.66%, reflecting profitability challenges. The gross profit margin is healthy at 52.06%, but the EBIT margin is negative, suggesting operational inefficiencies.

Balance Sheet

The debt-to-equity ratio is low at 0.22, indicating a conservative leverage position. However, the return on equity is negative at -9.08%, highlighting profitability issues. The equity ratio is strong, suggesting financial stability.

Cash Flow

The company exhibits a significant free cash flow growth rate of 186.27% in the TTM period, demonstrating strong cash generation capabilities. The operating cash flow to net income ratio is below 1, indicating some challenges in converting income to cash. However, the free cash flow to net income ratio is positive, showing effective cash management.

Breakdown	TTM	Jun 2024	Jun 2023	Jun 2022	Jun 2021	Jun 2020
Income Statement
Total Revenue	117.60M	93.62M	117.93M	117.93M	132.24M	149.18M
Gross Profit	58.85M	28.48M	79.77M	82.23M	86.78M	89.45M
EBITDA	27.02M	15.27M	33.67M	40.87M	59.66M	59.96M
Net Income	-4.03M	-10.92M	-2.21M	9.68M	28.55M	32.02M
Balance Sheet
Total Assets	178.28M	189.56M	230.81M	265.19M	226.31M	202.02M
Cash, Cash Equivalents and Short-Term Investments	16.29M	6.72M	22.22M	20.75M	11.29M	35.51M
Total Debt	14.22M	24.73M	45.63M	59.38M	25.25M	16.09M
Total Liabilities	59.11M	74.82M	103.12M	121.47M	88.99M	90.22M
Stockholders Equity	118.28M	113.95M	131.00M	142.34M	135.90M	110.90M
Cash Flow
Free Cash Flow	48.77M	32.50M	13.16M	-36.90M	-35.87M	43.49M
Operating Cash Flow	60.66M	32.83M	30.75M	37.53M	21.53M	99.12M
Investing Cash Flow	-23.20M	-17.18M	-14.78M	-78.33M	-53.72M	-61.34M
Financing Cash Flow	-24.54M	-20.91M	-13.40M	39.24M	7.42M	-10.80M

Digital Bros S.p.A. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 13.26
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Positive
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IT:DIB, the sentiment is Negative. The current price of 13.26 is above the 20-day moving average (MA) of 11.11, above the 50-day MA of 12.07, and above the 200-day MA of 12.81, indicating a bearish trend. The MACD of -0.59 indicates Positive momentum. The RSI at 22.35 is Positive, neither overbought nor oversold. The STOCH value of 4.19 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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
DGV	71 Outperform	€295.27M	13.32	―	2.82%	-24.28%	-57.55%
DIB	66 Neutral	€139.94M	8.63	-8.92%	―	-1.36%	-91.72%
Sector *	60 Neutral	$48.67B	4.58	-11.27%	4.14%	2.83%	-41.78%
CY4	60 Neutral	€181.97M	-4.10	-7.05%	―	29.64%	62.10%
IOT	58 Neutral	€349.73M	67.17	-3.24%	―	1.84%	-15.49%

Digital Bros S.p.A. Corporate Events

Digital Bros Publishes Interim Financial Report and Audit Review

Digital Bros S.p.A. has made its condensed interim financial report as of December 31, 2025, available to the public. The company has also released the related limited audit report on its condensed consolidated interim financial statements, which can be accessed at its registered office, on its website, and through an authorized storage mechanism.

The publication of these financial documents increases transparency for investors and other stakeholders, offering an updated view of the group’s financial performance midway through its fiscal cycle. This disclosure supports informed decision-making in the market and aligns with regulatory best practices for listed companies in the Italian financial landscape.

The most recent analyst rating on (IT:DIB) stock is a Hold with a EUR12.00 price target. To see the full list of analyst forecasts on Digital Bros S.p.A. stock, see the IT:DIB Stock Forecast page.

Digital Bros Swings Back to Profit on Strong Game Launches and Strategic Refocus

Digital Bros reported a sharp improvement in first-half 2025–2026 results, with consolidated revenues rising 60.4% year on year to €69 million, driven by the successful launch of Wuchang: Fallen Feathers and the Early Access release of Assetto Corsa Rally on Steam. The group’s EBITDA more than doubled to €33.6 million, EBIT swung to a positive €14.9 million, net profit reached €2 million after a prior-year loss, and the net financial position turned positive, prompting management to confirm full-year guidance for revenue growth and positive operating profitability.

The company is refocusing its editorial strategy on a smaller slate of games built around owned intellectual property, aiming for greater predictability and recurring income amid industry-wide turbulence marked by project cancellations, studio closures and job cuts. With fewer new launches expected in the second half, management plans to rely more on catalogue titles and targeted promotions, while positioning the group to withstand ongoing market volatility and uncertainties linked to evolving technologies such as artificial intelligence.

The most recent analyst rating on (IT:DIB) stock is a Hold with a EUR12.00 price target. To see the full list of analyst forecasts on Digital Bros S.p.A. stock, see the IT:DIB Stock Forecast page.