Modern Times Group AB (MTG.B) AI Stock Analysis

• Market Cap: kr10.43B
• Dividend Yield: N/A
• Average Volume (3M): 258.36K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.31
• Revenue Growth: 72.20%
• EPS Growth: -166.05%
• Country: SE
• Employees: 1,054
• Sector: General
• Sector Strength: N/A
• Industry: Electronic Gaming & Multimedia
• EPS (TTM): 2.65
• Shares Outstanding: 122,920,790
• 10 Day Avg. Volume: 324,122
• 30 Day Avg. Volume: 258,357
• PEG Ratio: 3.12
• Price to Book (P/B): 1.27
• Price to Sales (P/S): 1.16
• P/FCF Ratio: 8.99
• 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: kr143.00
• Price Target Upside: 29.41% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1
• EPS Forecast (FY): 15.2
• Revenue Forecast (FY): kr11.90B

• Rating: 56 Neutral
• Price Target: kr96.00 ▼(-13.12% Downside)
• Action: Reiterated Date: 02/07/26
• Date: Action: Reiterated 02/07/26

The score is primarily supported by strong free cash flow and healthy gross profitability, but it is weighed down by continued net losses and a sharp rise in debt. Technicals are notably weak with the stock trading well below major moving averages and bearish momentum, while valuation is also pressured by loss-making earnings (negative P/E).

Positive Factors

Free cash flow strength

Sustained, material free cash flow provides durable financial flexibility: it funds content and game development, supports working capital, enables opportunistic M&A or buybacks, and cushions the business against earnings volatility without relying solely on external financing.

High gross margins

A ~66% gross margin reflects scalable digital and content economics, giving MTG structural pricing and cost advantages. High gross profitability supports reinvestment in product, marketing and platform improvements and improves long-term cash conversion across cycles.

Solid equity base / capitalization

A strong equity base and moderate leverage provide a capital cushion to absorb shocks and fund strategic initiatives. This capitalization supports multi-year investment in gaming/entertainment while preserving access to capital markets and limiting refinancing pressure.

Negative Factors

Persistent net losses

Recurring net losses despite operating profitability indicate structural non-operating drains (e.g., financing, impairments or taxes). This constrains retained earnings, delays ROE normalization and limits shareholder returns until losses are reversed sustainably.

Sharp rise in debt

A large debt increase in a single year raises refinancing and interest-rate exposure and reduces optionality. Even with moderate overall leverage, the rapid change increases default and covenant risk and makes the company more sensitive to cash-flow volatility over the next 2–6 months.

Volatile profitability / negative ROE

Variable operating margins and negative ROE complicate forecasting and capital allocation. Inconsistent margin delivery undermines long-term investment planning, may hamper talent/content retention, and increases the risk that FCF and earnings will swing materially quarter-to-quarter.

Modern Times Group AB Business Overview & Revenue Model

Company Description

Modern Times Group MTG AB (publ), through its subsidiaries, operates as a digital entertainment company in the United States, the United Kingdom, Germany, rest of Europe, Singapore, India, New Zealand, and internationally. It operates through Esport and Gaming segments. The Esport segment operates national and international tournaments, as well as grassroots amateur cups, leagues, and festivals; and engages in the gaming technology, event management, advertising, and TV production business. This segment offers its products under the ESL and Dreamhack brands. The Gaming segment develops and publishes mobile and online games under the InnoGames and Kongregate names. The company was founded in 1987 and is headquartered in Stockholm, Sweden.

How the Company Makes Money

MTG generates revenue through multiple streams, primarily from its gaming and eSports operations, which include in-game purchases, subscriptions, and game sales. The company earns significant income from its digital gaming platforms and partnerships with other gaming companies. Additionally, MTG's entertainment division contributes to its revenues through advertising sales, licensing agreements, and distribution of television and radio programming. Key partnerships with other media companies and platforms also enhance MTG's reach and monetization opportunities, positioning it favorably within the competitive entertainment landscape.

Modern Times Group AB Financial Statement Overview

Summary

Strong and improving cash generation (2025 operating cash flow ~1.7B; free cash flow ~1.5B, +46%) and solid gross margin (~66%) support financial strength. The main offsets are continued net losses in 2024–2025 despite positive operating profit and a sharp increase in debt in 2025, which raises risk if profitability does not normalize.

Income Statement

Revenue growth improved meaningfully in 2025 (annual report: +14.1%) versus low-single-digit growth in 2024, and gross margin remains strong (about 66% in 2025). However, profitability is the key weak spot: net income stayed negative in 2024 and 2025 despite positive operating profit, and operating margins have been volatile versus the stronger 2022–2023 period. Overall, the top line and gross profitability look healthy, but the lack of consistent bottom-line profitability holds the score back.

Balance Sheet

The balance sheet shows a solid equity base (2025 equity of ~10.6B vs assets of ~19.3B) with moderate leverage (debt-to-equity ~0.37 in 2025), which is far better than the high leverage seen in 2020. That said, debt increased sharply in 2025 (to ~3.9B from ~0.75B in 2024) while returns on equity are negative due to net losses, which reduces financial quality. Net: generally sound capitalization, but rising leverage and negative returns are notable risks.

Cash Flow

Cash generation is a clear strength: operating cash flow rose to ~1.7B in 2025 and free cash flow to ~1.5B, with strong free cash flow growth (+46.3% in 2025). Free cash flow has remained solid across recent years even when earnings were negative, supporting financial flexibility. The main watch-out is that cash flow coverage metrics are not consistently high year-to-year, but overall cash conversion and free cash flow momentum are strong.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	11.58B	6.01B	5.83B	5.54B	5.31B
Gross Profit	7.64B	4.46B	4.25B	4.01B	2.58B
EBITDA	664.00M	760.00M	1.43B	1.42B	594.00M
Net Income	-62.00M	-210.00M	164.00M	252.00M	-455.00M
Balance Sheet
Total Assets	19.29B	18.07B	17.50B	18.77B	17.44B
Cash, Cash Equivalents and Short-Term Investments	1.23B	3.54B	2.96B	4.73B	943.00M
Total Debt	3.94B	753.00M	708.00M	771.00M	2.77B
Total Liabilities	8.67B	4.33B	3.79B	4.83B	7.51B
Stockholders Equity	10.62B	13.74B	13.71B	13.93B	8.00B
Cash Flow
Free Cash Flow	1.50B	1.24B	1.05B	634.00M	54.00M
Operating Cash Flow	1.72B	1.34B	1.26B	868.00M	306.00M
Investing Cash Flow	-7.50B	-551.00M	-2.35B	-636.00M	-3.37B
Financing Cash Flow	3.83B	-388.00M	-536.00M	-4.97B	2.81B

Modern Times Group AB Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 110.50
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SE:MTG.B, the sentiment is Negative. The current price of 110.5 is above the 20-day moving average (MA) of 90.03, above the 50-day MA of 101.38, and above the 200-day MA of 108.83, indicating a bearish trend. The MACD of -4.12 indicates Negative momentum. The RSI at 30.89 is Neutral, neither overbought nor oversold. The STOCH value of 61.85 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SE:MTG.B.

Modern Times Group AB Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
EMBRAC.B	66 Neutral	kr11.12B	1.27	10.27%	―	-46.66%	―
PDX	61 Neutral	kr12.63B	100.69	22.69%	3.16%	-18.54%	71.38%
G5EN	61 Neutral	kr405.97M	12.80	12.65%	9.28%	-14.68%	-29.97%
MTG.B	56 Neutral	kr10.43B	-154.08	-1.61%	―	72.20%	-166.05%
Sector *	55 Neutral	$6.65B	3.83	-15.92%	6.20%	10.91%	7.18%
SF	46 Neutral	kr2.18B	-0.89	―	―	-11.82%	-7499.16%
EG7	44 Neutral	kr1.33B	-0.69	―	―	1.74%	-5214.06%