Evolution Gaming Group AB (EVO) AI Stock Analysis

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Evolution Gaming Group AB

(EVO)

Rating:75Outperform

Price Target:―

Evolution Gaming Group AB demonstrates strong financial performance and attractive valuation metrics, with potential growth opportunities through global expansion. However, technical indicators suggest caution due to current bearish trends. Earnings call insights reflect mixed sentiment, with optimism about future growth offset by regional challenges.

Positive Factors

Financial Performance

The company has a strong free cash flow yield, which supports a significant share buyback program.

Growth Potential

There is an anticipated long runway of growth for Evolution Gaming that is not currently reflected in its valuation.

Negative Factors

Regulatory Challenges

Evolution has confirmed that the UK regulator, the Gambling Commission (UKGC), has announced a review of EVO’s UK operating licence.

Revenue Growth

Revenue growth slowed in all regions globally, most notably in Europe (-1% vs +9% in 4Q24) and Asia (+2% vs +11%).

Evolution Gaming Group AB (EVO) vs. iShares MSCI Sweden ETF (EWD)

Market Cap

kr138.01B

Dividend Yield4.54%

Average Volume (3M)786.35K

Price to Earnings (P/E)10.0

Beta (1Y)0.81

Revenue Growth10.67%

EPS Growth14.97%

CountrySE

Employees16,368

SectorTechnology

Sector Strength82

IndustryGambling, Resorts & Casinos

Share Statistics

EPS (TTM)13.48

Shares Outstanding204,462,160

10 Day Avg. Volume656,244

30 Day Avg. Volume786,349

Financial Highlights & Ratios

PEG Ratio0.33

Price to Book (P/B)4.95

Price to Sales (P/S)0.00

P/FCF Ratio21.94

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

kr1,001.78

Price Target Upside48.02% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering9

Evolution Gaming Group AB Business Overview & Revenue Model

Company DescriptionEvolution AB (publ) develops, produces, markets, and licenses live casino and slots solutions to gaming operators primarily in Europe and the United States. The company runs the game from a casino gaming table, which is streamed in real time and end users make betting decisions on their devices, such as computers, smartphones, tablets, etc. Its portfolio of online live table games primarily includes Live Roulette, Blackjack, Baccarat, Super Sic Bo, Dragon Tiger, Craps, Live Casino Hold'em, Three Card Poker, and Ultimate Texas Hold'em; and operates approximately 1000 tables. The company was formerly known as Evolution Gaming Group AB (publ). Evolution AB (publ) was founded in 2006 and is headquartered in Stockholm, Sweden.

How the Company Makes MoneyEvolution Gaming Group AB generates revenue primarily through licensing its live casino platform and games to online casino operators. The company charges its clients a fixed fee and a percentage of the net revenue generated from their games. This revenue-sharing model incentivizes both Evolution and its clients to maximize player engagement and satisfaction. Additionally, Evolution Gaming invests in developing a wide range of innovative and exclusive gaming content, which helps them attract new clients and retain existing ones. Key partnerships with major online casino brands and a strong presence in regulated markets also contribute significantly to the company's financial performance.

Evolution Gaming Group AB Earnings Call Summary

Earnings Call Date:Apr 30, 2025

(Q1-2025)

% Change Since: -15.09%|

Next Earnings Date:Jul 17, 2025

Earnings Call Sentiment Neutral

The call highlighted significant expansion and innovation efforts, particularly in North America and Latin America, and a robust product pipeline. However, these positives were counterbalanced by challenges in Europe and Asia due to regulatory and cyber issues, as well as a slight decline in EBITDA margin and RNG revenue growth.

Q1-2025 Updates

Positive Updates

Expansion and Growth Initiatives

Opened a new studio in Romania, with plans to open additional studios in Brazil, Philippines, Michigan, Malta, Colombia, Argentina, New Jersey, and Philadelphia. Demonstrates Evolution's commitment to growth and market share expansion.

New Game Releases and Innovation

Released several new games such as War, Race Track, and Bet Stacker Blackjack. Launched Marble Race, with upcoming releases including Super Color game and Ice Fishing, indicating a strong product pipeline.

North America and LatAm Growth

North America showed strong performance with a 15% year-on-year growth. LatAm exhibited a 9.7% growth year-on-year, despite initial regulatory challenges in Brazil.

Headcount and Recruitment Milestone

Surpassed 22,000 employees for the first time, representing an 8.4% year-on-year growth, driven by major recruitment pushes in key growth regions like Brazil and Philippines.

Negative Updates

Regulatory Challenges in Europe

Ringfencing measures in European markets with low channelization led to a revenue drop. European revenue was flat compared to Q1 2024 and down 6% from the fourth quarter.

Cyber Challenges in Asia

Continued efforts to combat criminal cyber activity in Asia have stabilized revenue but growth remains flat, impacting the overall financial performance.

Soft RNG Revenue Growth

RNG revenues grew by only 3.1% year-on-year, reflecting softer development compared to previous quarters and suggesting room for improvement.

EBITDA Margin Decline

EBITDA decreased by 1.1% year-on-year, with the margin at 65.6%, below the full-year guidance of 66% to 68%, influenced by ringfencing and cyberattack countermeasures.

Company Guidance

In the first quarter of 2025, Evolution reported a net revenue of EUR 520.9 million, reflecting a year-on-year growth of 3.9%. The EBITDA decreased by 1.1% from the previous year, with the margin slightly below the full-year guidance at 65.6%. Despite the challenges posed by ringfencing in regulated markets and cyberattack countermeasures in Asia, the company remains optimistic for the second half of the year. The Live segment revenue was EUR 448.7 million, growing by 4%, while RNG revenues were EUR 72.3 million, showing a softer growth of 3.1%. Evolution also surpassed 22,000 employees, marking an 8.4% year-on-year growth. The company continues to expand its global footprint, opening new studios in Romania, Brazil, and the Philippines, among others, while maintaining a strong product roadmap with over 110 game releases planned for 2025. Evolution's cash flow conversion was robust at 87%, and the company plans to pay a cash dividend of EUR 2.8 per share, totaling EUR 572 million.

Evolution Gaming Group AB Financial Statement Overview

Summary

Evolution Gaming Group AB exhibits a robust financial position, driven by strong profitability, efficient capital management, and sound financial health. The company has a low debt-to-equity ratio and excellent return on equity, indicating efficient use of shareholder funds. Strong cash flow metrics demonstrate healthy liquidity and operational efficiency.

Income Statement

Very Positive

Evolution Gaming Group AB demonstrates excellent profitability and revenue growth. The TTM (Trailing-Twelve-Months) gross profit and net profit margins are robust due to high operational efficiency, with a gross profit margin of 100% and a net profit margin of 59.0%. The revenue growth rate is impressive at 17.2% from 2023 to 2024. EBIT and EBITDA margins are also strong, indicating good cost management and profitability.

Balance Sheet

Very Positive

The balance sheet of Evolution Gaming Group AB is strong, characterized by a low debt-to-equity ratio of 0.022, reflecting minimal leverage. The return on equity (ROE) is excellent at 29.4%, indicating efficient use of shareholder funds. The equity ratio is solid at 73.5%, showcasing a stable financial structure with a significant portion of assets financed by equity.

Cash Flow

Very Positive

Cash flow metrics indicate healthy liquidity and operational efficiency. The operating cash flow to net income ratio is 1.11, suggesting strong cash generation relative to profit. Free cash flow has grown steadily, with a free cash flow to net income ratio of 1.00, indicating efficient capital expenditure management and effective cash utilization.

TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
2.08B	2.06B	1.80B	1.46B	1.07B	561.13M
	Gross Profit
2.08B	2.11B	1.80B	1.46B	1.09B	572.25M
	EBIT
1.41B	1.42B	1.14B	908.06M	654.00M	299.70M
	EBITDA
1.41B	1.59B	1.20B	1.01B	730.94M	332.26M
	Net Income Common Stockholders
1.23B	1.24B	1.07B	843.36M	605.43M	284.62M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
958.09M	787.07M	985.76M	532.55M	421.43M	221.68M
	Total Assets
5.69B	5.35B	4.97B	4.37B	3.90B	3.17B
	Total Debt
92.92M	93.66M	79.46M	79.55M	67.81M	49.97M
	Net Debt
-865.16M	-693.41M	-906.30M	-453.00M	-353.62M	-171.71M
	Total Liabilities
1.51B	1.37B	967.27M	909.09M	712.12M	442.94M
	Stockholders Equity
4.18B	3.97B	4.01B	3.46B	3.19B	2.73B
Cash Flow		Free Cash Flow
1.23B	1.16B	1.07B	780.53M	537.30M	279.17M
	Operating Cash Flow
1.36B	1.30B	1.17B	877.47M	598.89M	316.05M
	Investing Cash Flow
-238.41M	-247.97M	-139.36M	-371.60M	-154.95M	6.82M
	Financing Cash Flow
-1.13B	-1.24B	-574.50M	-394.20M	-248.52M	-279.91M

Evolution Gaming Group AB Technical Analysis

Technical Analysis Sentiment

Negative

Last Price676.80

Price Trends

50DMA

692.43

Negative

100DMA

737.61

Negative

200DMA

828.12

Negative

Market Momentum

MACD

-6.89

Negative

RSI

53.76

Neutral

STOCH

89.65

Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SE:EVO, the sentiment is Negative. The current price of 676.8 is above the 20-day moving average (MA) of 657.55, below the 50-day MA of 692.43, and below the 200-day MA of 828.12, indicating a neutral trend. The MACD of -6.89 indicates Negative momentum. The RSI at 53.76 is Neutral, neither overbought nor oversold. The STOCH value of 89.65 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SE:EVO.

Evolution Gaming Group AB Peers Comparison

Overall Rating

UnderperformOutperform

Sector (62)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
KAMBI	78 Outperform	$3.64B	20.65	9.13%	―	-4.66%	-32.21%
BETS.B	77 Outperform	kr26.71B	12.40	22.34%	1.12%	17.47%	18.78%
EVO	75 Outperform	kr138.01B	9.99		4.54%	10.67%	14.97%
Sector *	62 Neutral	$11.92B	10.48	-7.50%	2.95%	7.40%	-8.18%
CTM	38 Underperform	$140.13M	―	-42.17%	―	-31.61%	26.26%

* Technology Sector Average

Performance Comparison

SE:EVO

Evolution Gaming Group AB

669.00

-338.28

-33.58%

SE:KAMBI

Kambi Group

124.50

25.20

25.38%

SE:BETS.B

Betsson AB

191.10

83.41

77.46%

SE:CTM

Catena Media

1.73

-3.85

-69.00%

Evolution Gaming Group AB Corporate Events

Evolution AB Enhances Capital Structure with Share Repurchase

Jun 9, 2025

Evolution AB has repurchased 217,000 of its own shares between June 2 and June 5, 2025, as part of a board-approved repurchase program aimed at improving the company’s capital structure and enhancing shareholder value. This program, compliant with EU regulations, allows Evolution to acquire a maximum of 20,446,216 shares, with Citibank independently managing the timing of purchases on Nasdaq Stockholm.

The most recent analyst rating on (SE:EVO) stock is a Hold with a SEK1210.00 price target. To see the full list of analyst forecasts on Evolution Gaming Group AB stock, see the SE:EVO Stock Forecast page.

Evolution AB Enhances Shareholder Value Through Share Repurchase

Jun 2, 2025

Evolution AB has repurchased 202,847 of its own shares between May 26 and May 30, 2025, as part of a board-approved repurchase program aimed at improving its capital structure and enhancing shareholder value. Conducted under the EU Market Abuse Regulation and Safe Harbour Regulation, these acquisitions were executed on Nasdaq Stockholm by Citibank, bringing Evolution’s total holding to 596,847 shares, with a maximum of 20,446,216 shares permitted for acquisition.

Evolution AB Reduces Share Count Following AGM Decision

May 30, 2025

Evolution AB (publ) announced a reduction in its number of shares following the cancellation of 7,371,042 shares, resulting in a total of 204,462,162 shares and votes as of May 30, 2025. This change, resolved during the Annual General Meeting, reflects the company’s ongoing strategic adjustments and may impact its market positioning and shareholder value.

Evolution AB Enhances Capital Structure with Share Repurchase

May 26, 2025

Evolution AB (publ) has repurchased 259,000 of its own shares between May 19 and May 23, 2025, as part of a board-approved program aimed at improving its capital structure and enhancing shareholder value. The repurchase was conducted under the EU Market Abuse Regulation and Safe Harbour Regulation, with Citibank executing the transactions independently. This move is expected to positively impact Evolution’s financial health and market positioning, reinforcing its commitment to shareholder interests.

Evolution AB Enhances Shareholder Value with Share Repurchase

May 19, 2025

Evolution AB has repurchased 135,000 of its own shares as part of a board-approved program aimed at improving its capital structure and enhancing shareholder value. The repurchase, conducted on Nasdaq Stockholm through Citibank, aligns with EU regulations and allows for a maximum acquisition of over 20 million shares, reflecting Evolution’s strategic financial management and commitment to its investors.

Evolution AB Continues Share Repurchase Program to Optimize Capital Structure

May 14, 2025

Evolution AB (publ) has announced a continuation of its share repurchase program, authorized by the 2025 annual general meeting, to optimize its capital structure and enhance shareholder value. The company plans to repurchase shares worth up to EUR 346 million on Nasdaq Stockholm or another regulated market, following the EU Market Abuse Regulation and Safe Harbour Regulation, with the aim of reducing capital and potentially increasing the value for stakeholders.

Evolution Gaming Group AB Announces Key Resolutions at Annual Meeting

May 9, 2025

At its annual general meeting, Evolution Gaming Group AB approved several key resolutions, including a dividend of EUR 2.80 per share and the re-election of board members. The meeting also authorized the board to manage share acquisitions and issuances, aiming to optimize capital structure and support potential acquisitions, reflecting the company’s strategic focus on growth and shareholder value.

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.