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Embracer Group AB (SE:EMBRAC.B)
:EMBRAC.B

Embracer Group AB (EMBRAC.B) AI Stock Analysis

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SE:EMBRAC.B

Embracer Group AB

(EMBRAC.B)

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Neutral 62 (OpenAI - 4o)
Rating:62Neutral
Price Target:
kr91.00
▲(55.98% Upside)
The overall stock score of 62 reflects a mix of strong valuation and financial stability, offset by bearish technical indicators and revenue challenges. The low P/E ratio suggests undervaluation, but the negative market momentum and revenue decline are significant concerns.
Positive Factors
Strong Profitability
High profitability margins indicate efficient operations and strong pricing power, supporting long-term financial health and competitive positioning.
Low Leverage
Low leverage enhances financial stability, reducing risk and providing flexibility for future investments or navigating economic downturns.
Diverse Revenue Streams
A diverse revenue model mitigates risk by not relying on a single income source, enhancing resilience against market fluctuations.
Negative Factors
Revenue Decline
A declining revenue trend poses challenges for growth and could impact the ability to invest in new projects or maintain competitive advantages.
Modest Free Cash Flow Growth
Limited cash flow growth may constrain the company's ability to reinvest in its business or reduce debt, affecting long-term strategic initiatives.
Revenue Growth Challenges
Challenges in reversing revenue decline and enhancing cash flow could hinder the company's ability to capitalize on market opportunities.

Embracer Group AB (EMBRAC.B) vs. iShares MSCI Sweden ETF (EWD)

Embracer Group AB Business Overview & Revenue Model

Company DescriptionEmbracer Group AB (EMBRAC.B) is a Swedish video game holding company that operates in the interactive entertainment sector. The company is involved in the development, publishing, and distribution of video games across various platforms, including consoles, PC, and mobile devices. Embracer Group encompasses a diverse portfolio of subsidiaries, including game development studios and publishing labels, which produce a wide range of game genres catering to different audiences. Its core offerings include both original titles and franchises, as well as collaborations with third-party developers.
How the Company Makes MoneyEmbracer Group generates revenue primarily through the sale of video games, including both physical and digital copies. Key revenue streams include game sales, downloadable content (DLC), in-game purchases, and subscription services. The company also benefits from licensing agreements and merchandise sales related to its game franchises. Additionally, Embracer Group engages in partnerships with other publishers and developers to co-publish and co-develop games, further enhancing its revenue potential. The diverse portfolio of studios allows Embracer to tap into multiple market segments, contributing to a steady flow of income and growth opportunities.

Embracer Group AB Earnings Call Summary

Earnings Call Date:Nov 14, 2024
(Q2-2025)
|
% Change Since: |
Next Earnings Date:Feb 12, 2026
Earnings Call Sentiment Neutral
The earnings call presented a mixed outlook with significant achievements such as Asmodee's solid performance and the strategic divestment of Easybrain. However, these were countered by notable challenges including a decline in net sales, negative free cash flow, and underperformance in several game releases. While there are promising prospects with upcoming game releases and a strengthened financial position post-divestment, the current challenges balance out the positive aspects.
Q2-2025 Updates
Positive Updates
Asmodee's Solid Earnings Growth
Asmodee achieved SEK 700 million in profitability for the quarter, demonstrating strong earnings growth year-over-year ahead of their listing and Capital Market Day.
Successful Game Launch: Satisfactory
The game Satisfactory exceeded expectations with more than 200,000 concurrent players on PC during the full game launch.
Kingdom Come: Deliverance II On Track
No delays are expected for Kingdom Come: Deliverance II, set to release in February, which has sold over 8 million copies of the first game.
Mobile Games Profitability
The Mobile Games segment had a strong quarter with SEK 1.3 billion in revenues and a 28% adjusted EBIT margin.
Easybrain Divestment
The divestment of Easybrain is expected to significantly transform the financial position of Embracer, with a purchase price of USD 1.2 billion all in cash, strengthening the balance sheet.
Negative Updates
Decline in Net Sales
Net sales declined by SEK 2.3 billion year-over-year, primarily due to the absence of major releases like Remnant II and Payday 3 and the divestments of Saber and Gearbox.
Negative Free Cash Flow
Free cash flow was negative at minus SEK 500 million due to increased working capital from inventory buildup.
PC/Console Segment Challenges
The PC/Console segment experienced a negative organic growth of 33% and a softer performance due to weaker ROI on release products and delays in game releases.
Underperforming Game Releases
Several mid-sized releases underperformed with a return on investment below 1, impacting overall profitability.
Challenges in Entertainment & Services
The Entertainment & Services segment had a slower quarter with negative 9% organic growth year-over-year and a 2% adjusted EBIT margin.
Company Guidance
In the recent call, Embracer Group's CEO Lars Wingefors provided guidance for the second quarter of the fiscal year 2025, highlighting several key financial metrics and strategic updates. The company reported net sales of SEK 8.5 billion, a decrease from the previous year due to the absence of significant releases like Remnant and Payday. Despite this, Asmodee, a key segment, showed solid earnings growth with SEK 700 million in profitability. However, the PC/Console segment faced challenges, with a 33% decline in organic growth and an adjusted EBIT margin of 8% due to delays and weaker returns on investment. The mobile games segment performed well, generating SEK 1.3 billion in revenue with a 28% adjusted EBIT margin. The company also announced the transformative divestment of Easybrain for USD 1.2 billion, expected to significantly strengthen Embracer's financial position, reducing net debt to SEK 500 million on a pro forma basis. Looking ahead, key releases like Kingdom Come: Deliverance II and the remastered Legacy of Kain series are expected to support future growth.

Embracer Group AB Financial Statement Overview

Summary
Embracer Group AB shows strong profitability with a healthy gross profit margin of 72.62% and a net profit margin of 20.39%. However, the company faces challenges with a significant revenue decline of 15.66% and negative free cash flow growth of -416.60%, indicating cash flow issues. The balance sheet is stable with low leverage, but declining stockholders' equity is a concern.
Income Statement
65
Positive
Embracer Group AB's income statement shows mixed performance. The TTM data indicates a significant revenue decline of 15.66%, which is concerning. However, the company maintains a healthy gross profit margin of 72.62% and a net profit margin of 20.39%, suggesting strong profitability. The EBIT and EBITDA margins are also solid, although they have decreased compared to previous periods. Overall, while profitability remains strong, the declining revenue trend is a risk factor.
Balance Sheet
70
Positive
The balance sheet of Embracer Group AB reflects a stable financial position. The debt-to-equity ratio is low at 0.08, indicating conservative leverage. The return on equity (ROE) is 13.31%, which is a positive sign of profitability. The equity ratio is robust, suggesting a strong capital structure. However, the decline in stockholders' equity over the periods is a point of concern. Overall, the balance sheet is solid, with low leverage and decent profitability.
Cash Flow
60
Neutral
The cash flow statement highlights some challenges for Embracer Group AB. The TTM free cash flow growth rate is significantly negative at -416.60%, indicating cash flow issues. The operating cash flow to net income ratio is 0.57, suggesting moderate cash generation relative to net income. The free cash flow to net income ratio is negative, reflecting cash flow constraints. While operating cash flow remains positive, the negative free cash flow growth is a concern.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue19.95B22.37B42.21B37.66B17.04B9.02B
Gross Profit15.69B18.38B30.78B27.68B14.63B6.70B
EBITDA13.71B12.54B4.70B12.24B4.07B4.26B
Net Income8.10B5.96B-18.18B4.45B-4.29B287.00M
Balance Sheet
Total Assets39.71B42.13B95.70B116.07B93.45B33.75B
Cash, Cash Equivalents and Short-Term Investments6.13B7.10B3.34B4.68B5.81B14.30B
Total Debt2.48B2.35B21.18B21.75B20.31B1.48B
Total Liabilities9.34B10.94B43.21B51.35B48.64B6.59B
Stockholders Equity30.31B31.13B52.42B64.67B44.59B27.15B
Cash Flow
Free Cash Flow843.00M-252.00M529.00M-1.61B220.70M1.69B
Operating Cash Flow4.25B3.49B7.89B5.38B4.28B3.90B
Investing Cash Flow8.73B14.02B-9.95B-15.49B-37.89B-6.80B
Financing Cash Flow-9.74B-12.65B832.00M8.50B25.02B14.73B

Embracer Group AB Technical Analysis

Technical Analysis Sentiment
Negative
Last Price58.34
Price Trends
50DMA
63.18
Negative
100DMA
63.73
Negative
200DMA
69.26
Negative
Market Momentum
MACD
-0.70
Negative
RSI
43.12
Neutral
STOCH
26.29
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SE:EMBRAC.B, the sentiment is Negative. The current price of 58.34 is below the 20-day moving average (MA) of 59.47, below the 50-day MA of 63.18, and below the 200-day MA of 69.26, indicating a bearish trend. The MACD of -0.70 indicates Negative momentum. The RSI at 43.12 is Neutral, neither overbought nor oversold. The STOCH value of 26.29 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SE:EMBRAC.B.

Embracer 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
74
Outperform
$722.72M10.4712.65%9.66%-14.68%-29.97%
67
Neutral
kr17.02B26.6822.69%3.12%-18.54%71.38%
62
Neutral
kr13.83B1.6710.27%-46.66%
60
Neutral
$48.67B4.58-11.27%4.14%2.83%-41.78%
55
Neutral
kr12.68B-66.97-1.61%72.20%-166.05%
52
Neutral
kr3.30B-0.45-11.82%-7499.16%
49
Neutral
kr1.18B-6.881.74%-5214.06%
* Communication Services Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
SE:EMBRAC.B
Embracer Group AB
58.34
-8.86
-13.18%
SE:MTG.B
Modern Times Group AB
112.60
17.00
17.78%
SE:PDX
Paradox Interactive AB
161.00
-39.00
-19.50%
SE:G5EN
G5 Entertainment AB
86.60
-14.17
-14.06%
SE:SF
Stillfront Group AB
6.28
-1.96
-23.79%
SE:EG7
Enad Global 7 AB
13.70
-2.52
-15.54%

Embracer Group AB Corporate Events

Embracer Group Divests Arc Games and Cryptic Studios to Focus on Core IPs
Nov 26, 2025

Embracer Group AB has announced the divestment of Arc Games and Cryptic Studios to Project Golden Arc, Inc., backed by XD Inc., for USD 30 million. This move allows Embracer to concentrate on its strategic assets, retaining rights to the Remnant franchise and the multiplayer game Fellowship, which will be part of the Coffee Stain Group spin-off, enhancing its focus on profitability and core intellectual properties.

Embracer Group to List Coffee Stain on Nasdaq
Nov 26, 2025

Embracer Group AB has announced the distribution of all shares of its subsidiary, Coffee Stain Group AB, to its shareholders, with trading expected to commence on Nasdaq First North Premier Growth Market on 11 December 2025. This move marks Coffee Stain’s transition into a standalone listed company, which is anticipated to enhance its market presence and operational focus, potentially benefiting stakeholders by capitalizing on its strong foundation in game development and community engagement.

Embracer Group to Spin Off Coffee Stain Group with Strong Financial Backing
Nov 17, 2025

Embracer Group AB has announced its plan to list its subsidiary, Coffee Stain Group AB, on Nasdaq First North Premier Growth Market in Stockholm, aiming for completion by December 2025. Coffee Stain will be left with a strong financial position, including a pro-forma net cash position of SEK 500 million, enabling it to invest in its game portfolio and pursue mergers and acquisitions, while also returning surplus capital to shareholders in line with its dividend policy.

Embracer Group Faces Sales Decline but Maintains Profitability Outlook
Nov 13, 2025

Embracer Group AB reported a challenging second quarter of 2025, with net sales decreasing by 19% compared to the previous year, despite achieving 6% organic growth. The company faced weak performance in new releases, notably in PC/Console Games, while Mobile Games and Entertainment & Services showed solid results. Embracer remains focused on strengthening profitability and unlocking long-term value, with expectations to deliver at least SEK 1 billion in Adjusted EBIT for the financial year. The company also highlighted its strategic flexibility with a strong balance sheet and reduced cash earnout obligations.

Embracer Group Completes SEK 500 Million Share Buyback Program
Nov 7, 2025

Embracer Group AB has completed its SEK 500 million share buyback program, repurchasing a total of 4,830,742 B shares to optimize its capital structure and increase shareholder value. The program, which adhered to EU regulations, concluded ahead of its scheduled end date, with the board planning to propose the cancellation of repurchased shares to further enhance capital efficiency.

Embracer Group to Present Q2 Financial Report
Nov 6, 2025

Embracer Group AB has announced a presentation of its Q2 interim report for the fiscal year 2025/26, scheduled for November 13. The presentation, led by CEO Phil Rogers and CFO Müge Bouillon, will provide insights into the company’s financial performance and strategic direction, offering stakeholders an opportunity to engage and ask questions. This event underscores Embracer’s commitment to transparency and stakeholder engagement, potentially impacting investor confidence and market positioning.

Embracer Group Executes Strategic Share Buyback to Enhance Shareholder Value
Nov 4, 2025

Embracer Group AB announced the repurchase of 728,742 B shares as part of a SEK 500 million buyback program aimed at optimizing its capital structure and increasing shareholder value. The buyback, conducted in compliance with EU regulations, reflects Embracer’s strategic efforts to manage its share capital effectively, with plans to propose the cancellation of repurchased shares at the 2026 annual general meeting.

Embracer Group to Distribute Coffee Stain Shares to Shareholders
Nov 3, 2025

Embracer Group AB announced during an extra general meeting that it will distribute all its shares in Coffee Stain Group AB to its shareholders, with each Embracer share entitling the holder to a corresponding Coffee Stain share. This strategic move is expected to culminate in Coffee Stain’s shares being traded on Nasdaq First North Premier Growth Market by the end of 2025, potentially impacting Embracer’s market positioning and offering new opportunities for stakeholders.

Embracer Group Expands Share Capital and Voting Rights
Oct 31, 2025

Embracer Group AB has announced an increase in its number of shares and votes due to the issuance of new shares related to earn-out payments, bringing the total to 228,777,965 shares. This adjustment reflects the company’s ongoing financial activities and may impact its shareholder structure and market positioning.

Embracer Group Executes Share Buyback to Boost Shareholder Value
Oct 21, 2025

Embracer Group AB announced the repurchase of 588,663 B shares between October 13 and October 17, 2025, as part of a SEK 500 million share buyback program. The initiative aims to optimize the company’s capital structure and enhance shareholder value, with plans to propose the cancellation of repurchased shares at the 2026 annual general meeting.

Embracer Group to Distribute Coffee Stain Shares and Plan Nasdaq Listing
Oct 20, 2025

Embracer Group AB has announced the proposed distribution of shares in Coffee Stain Group AB to its shareholders, with plans to list Coffee Stain’s class B shares on Nasdaq First North Premier Growth Market in Stockholm by the end of 2025. This strategic move is expected to enhance Coffee Stain’s market presence and provide shareholders with direct investment opportunities in the successful game development company known for titles like Goat Simulator and Deep Rock Galactic.

Embracer Group Prepares Coffee Stain for Nasdaq Listing with Capital Markets Event
Oct 8, 2025

Embracer Group AB is organizing a Capital Markets Event for its subsidiary, Coffee Stain Group, ahead of its listing on Nasdaq First North Premier Growth Market. The event will highlight Coffee Stain’s portfolio, operating model, and future growth opportunities, with key presentations from the CEO and CFO. This move is expected to enhance Coffee Stain’s visibility and market positioning, potentially impacting investor interest and stakeholder engagement.

Embracer Group AGM Resolutions and Strategic Authorizations
Sep 18, 2025

Embracer Group AB held its Annual General Meeting, where key resolutions included the adoption of financial statements, no dividend distribution, and re-election of board members. The meeting also approved remuneration adjustments and authorized the board to issue shares to enhance financial flexibility and support potential acquisitions.

Embracer Group Announces SEK 500 Million Share Buyback Program
Sep 18, 2025

Embracer Group AB has announced its intention to initiate a share buyback program worth up to SEK 500 million, contingent upon authorization from the annual general meeting. The buyback aims to optimize the company’s capital structure and enhance shareholder value by reducing share capital, with the program set to run from September 19 to December 2, 2025. The buybacks will be conducted on Nasdaq Stockholm, adhering to specific regulatory guidelines, and will be managed independently by SB1 Markets.

Embracer Group to Host Annual General Meeting via Live Webcast
Sep 11, 2025

Embracer Group AB has announced that its Annual General Meeting (AGM) will be available via live webcast on September 18, 2025. The meeting will feature an operations overview by CEO Phil Rogers and Group CFO Müge Bouillon, followed by presentations and a Q&A session led by equity analyst Erik Larsson. This event is open to all stakeholders and will be conducted in English, providing an opportunity for shareholders and interested parties to engage directly with the company’s leadership.

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: Nov 27, 2025