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

• Market Cap: €156.92M
• Dividend Yield: N/A
• Average Volume (3M): 39.38K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.47
• Revenue Growth: -20.62%
• EPS Growth: -393.17%
• Country: IT
• Employees: 286
• Sector: Communication Services
• Sector Strength: 97
• Industry: Electronic Gaming & Multimedia
• EPS (TTM): 0.10
• Shares Outstanding: 14,265,037
• 10 Day Avg. Volume: 56,981
• 30 Day Avg. Volume: 39,376
• PEG Ratio: 0.00
• Price to Book (P/B): 0.00
• Price to Sales (P/S): 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: €11.00
• Price Target Upside: -4.68% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 1

• Rating: 48 Neutral
• Price Target: €11.00 ▼(-4.68% Downside)

Digital Bros S.p.A. faces significant challenges with declining revenue and profitability, as well as bearish technical indicators. The strong cash flow and stable balance sheet provide some support, but the negative P/E ratio and lack of dividend yield further weigh down the overall score. The stock's current technical weakness and valuation concerns are the most significant factors influencing the score.

Positive Factors

Cash Flow Growth

Strong free cash flow growth indicates improved cash generation, supporting future investments and debt repayment, enhancing financial stability.

Balance Sheet Health

A moderate debt-to-equity ratio suggests a solid capital structure, providing financial flexibility and reducing risk in volatile market conditions.

Operational Efficiency

Positive EBIT and EBITDA margins demonstrate the company's ability to maintain operational efficiency, even amidst revenue declines, supporting long-term profitability.

Negative Factors

Declining Revenue

Declining revenue growth reflects challenges in market competitiveness and product demand, potentially impacting long-term growth and market position.

Negative Profitability

Negative net income and profit margins indicate profitability challenges, which could strain financial resources and limit reinvestment capabilities.

Earnings Decline

A sharp decline in EPS reflects deteriorating earnings power, which may affect investor confidence and the company's ability to fund future growth initiatives.

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 S.p.A. generates revenue through multiple channels. The primary source of income is the sale of video games, which includes both physical and digital formats. The company develops and publishes its own titles while also distributing third-party games. Digital Bros benefits from digital sales through platforms like Steam, PlayStation Network, and Xbox Live, which offer high-margin opportunities due to the absence of physical production costs. Additionally, the company engages in licensing agreements and partnerships with other game developers and publishers, further augmenting its revenue streams. The company also monetizes its games through in-game purchases and downloadable content (DLC), which enhance the gaming experience and offer additional revenue potential.

Digital Bros S.p.A. Financial Statement Overview

Summary

Digital Bros S.p.A. faces challenges with declining revenue and profitability, as reflected in the income statement. However, the company maintains a stable balance sheet with a reasonable debt level and strong equity position. The cash flow statement is a bright spot, showing significant growth in free cash flow, which could support future investments and debt repayment.

Income Statement

Digital Bros S.p.A. has experienced a decline in revenue over the past year, with a negative revenue growth rate of -13.77%. The company also reported a negative net income, resulting in a negative net profit margin. However, the EBIT and EBITDA margins remain positive, indicating operational efficiency despite the revenue decline. The gross profit margin has decreased compared to previous years, reflecting challenges in maintaining profitability.

Balance Sheet

The balance sheet shows a moderate debt-to-equity ratio, indicating a balanced approach to leveraging. However, the return on equity is negative, reflecting the company's recent net losses. The equity ratio is strong, suggesting a solid capital structure with a significant portion of assets financed by equity.

Cash Flow

The cash flow statement reveals a strong free cash flow growth rate of 41.18%, indicating improved cash generation capabilities. The operating cash flow to net income ratio is positive, suggesting that the company is generating sufficient cash from operations despite net losses. The free cash flow to net income ratio is also positive, highlighting effective cash management.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	93.62M	93.62M	117.93M	117.93M	132.24M	149.18M
Gross Profit	48.74M	28.48M	79.77M	82.23M	86.78M	89.45M
EBITDA	15.45M	15.27M	33.67M	40.87M	59.66M	59.96M
Net Income	-10.92M	-10.92M	-2.21M	9.68M	28.55M	32.02M
Balance Sheet
Total Assets	189.56M	189.56M	230.81M	265.19M	226.31M	202.02M
Cash, Cash Equivalents and Short-Term Investments	6.72M	6.72M	22.22M	20.75M	11.29M	35.51M
Total Debt	24.73M	24.73M	45.63M	59.38M	25.25M	16.09M
Total Liabilities	74.82M	74.82M	103.12M	121.47M	88.99M	90.22M
Stockholders Equity	113.95M	113.95M	131.00M	142.34M	135.90M	110.90M
Cash Flow
Free Cash Flow	17.04M	32.50M	13.16M	-36.90M	-35.87M	43.49M
Operating Cash Flow	32.83M	32.83M	30.75M	37.53M	21.53M	99.12M
Investing Cash Flow	-17.18M	-17.18M	-14.78M	-78.33M	-53.72M	-61.34M
Financing Cash Flow	-20.91M	-20.91M	-13.40M	39.24M	7.42M	-10.80M

Digital Bros S.p.A. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 11.54
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

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 11.54 is below the 20-day moving average (MA) of 11.82, below the 50-day MA of 12.26, and below the 200-day MA of 12.62, indicating a bearish trend. The MACD of -0.41 indicates Positive momentum. The RSI at 44.49 is Neutral, neither overbought nor oversold. The STOCH value of 23.12 is Neutral, 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	81 Outperform	€323.78M	17.53	―	2.47%	-24.28%	-57.55%
IOT	62 Neutral	€454.11M	―	-5.53%	―	-3.47%	-947.32%
Sector *	60 Neutral	$48.67B	4.58	-11.27%	4.14%	2.83%	-41.78%
CY4	54 Neutral	€138.84M	―	-7.05%	―	29.64%	62.10%
DIB	48 Neutral	€156.92M	―	-8.92%	―	-20.62%	-393.17%

Digital Bros S.p.A. Corporate Events

Digital Bros Group’s Wuchang: Fallen Feathers Tops Steam Rankings Amid Technical Challenges

Digital Bros Group announced the launch of its new video game, Wuchang: Fallen Feathers, which has already achieved first place in global Steam rankings and attracted over 130,000 simultaneous players. Despite its initial success, the game has faced technical issues on the Steam platform, prompting the company and its partners to work on resolving these problems swiftly, with a corrective update expected soon. The company views the game as a valuable project with potential for significant fiscal and strategic impact.

The most recent analyst rating on (IT:DIB) stock is a Buy with a EUR22.00 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 Group Revises FY 2024-2025 Outlook Amid Market Challenges

Digital Bros Group has updated its financial outlook for the fiscal year ending June 30, 2025, projecting a decline in EBIT due to the underperformance of its new video game, Blades of Fire, and higher-than-expected write-offs. Despite these challenges, the company expects its net financial debt to improve significantly, falling below Euro 20 million, which is better than previous estimates.

The most recent analyst rating on (IT:DIB) stock is a Buy with a EUR22.00 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 Gains Influence Over Starbreeze AB with Board Election

Digital Bros Group has announced that it has acquired significant influence over its Swedish subsidiary, Starbreeze AB, following the election of its CFO, Stefano Salbe, to Starbreeze’s Board of Directors. This development allows Digital Bros to consolidate Starbreeze using the equity method, which is expected to impact the company’s financial statements and decision-making processes, potentially enhancing its strategic position in the video game industry.

The most recent analyst rating on (IT:DIB) stock is a Buy with a EUR22.00 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 Reports Improved Operating Margin Amid Revenue Decline

Digital Bros S.p.A. reported its financial results for the first nine months of the 2024-2025 fiscal year, showing a decline in net revenues by 12.3% to 66.4 million Euros, while achieving a positive operating margin of 2.3 million Euros, a significant improvement from the previous year. Despite the declining revenues, the company has managed to maintain a stable operating margin by focusing on high-margin video games and discontinuing less profitable projects, which has led to a reduced net loss and improved financial debt position.

The most recent analyst rating on (IT:DIB) stock is a Buy with a EUR22.00 price target. To see the full list of analyst forecasts on Digital Bros S.p.A. stock, see the IT:DIB Stock Forecast page.