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

• Market Cap: kr12.71B
• Dividend Yield: N/A
• Average Volume (3M): 258.36K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.32
• 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): 3.00
• Shares Outstanding: 122,917,480
• 10 Day Avg. Volume: 324,122
• 30 Day Avg. Volume: 258,357
• PEG Ratio: 0.24
• Price to Book (P/B): 0.83
• Price to Sales (P/S): 1.90
• P/FCF Ratio: 9.21
• 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): N/A
• Revenue Forecast (FY): N/A

• Rating: 55 Neutral
• Price Target: kr107.00 ▼(-3.17% Downside)

Modern Times Group AB's stock score is primarily influenced by its robust revenue growth, which is overshadowed by significant profitability challenges. The technical indicators suggest bearish momentum, and the valuation metrics highlight concerns due to the negative P/E ratio and lack of dividend yield. The absence of earnings call data and corporate events means these factors did not impact the score.

Positive Factors

Revenue Growth

Sustained high top-line growth signals strong market demand for MTG's gaming and entertainment offerings, enabling scale advantages. Over 2-6 months this supports reinvestment in content, user acquisition and platform development, strengthening long-term competitive position.

High Gross Margin

A ~71% gross margin reflects a scalable digital content and games model with low incremental costs per user. This structural margin headroom allows MTG to invest in R&D, marketing and live services while preserving the potential to drive sustainable operating profits if fixed costs are controlled.

Conservative Leverage

Low leverage and a strong equity base provide financial flexibility to fund content development, M&A or cyclical pressure without forcing dilutive capital raises. Over months this reduces solvency risk and preserves capacity to invest in growth initiatives or weather sector volatility.

Negative Factors

Negative Net Profitability

Despite healthy gross margins and revenue growth, the negative net margin shows expenses and non-operating items erode results. Persisting net losses over months hamper ability to retain earnings, delay return on investment and require either sustained margin improvement or external funding.

Declining Free Cash Flow Growth

A sharp contraction in free cash flow growth is a durable concern: it limits internal funding for game development, marketing and capital allocation. If FCF growth remains depressed, MTG's ability to invest organically or reduce reliance on external capital is materially constrained.

Earnings Per Share Deterioration

Severely negative EPS growth signals erosion of shareholder value despite revenue gains. Over a multi-month horizon, this pressures capital-raising economics, management credibility and limits strategic optionality until the company converts top-line momentum into consistent net profitability.

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

Modern Times Group AB is experiencing robust revenue growth, but profitability remains a significant challenge with consistent net losses. The balance sheet is stable with low leverage, but the negative return on equity is a concern. Cash flow generation is strong relative to net income, but the decline in free cash flow growth is a potential risk. Overall, the company shows potential for growth but needs to address profitability issues to improve financial health.

Income Statement

Modern Times Group AB has shown a strong revenue growth rate of 18.01% in the TTM, indicating a positive trajectory in sales. However, the company is struggling with profitability, as evidenced by a negative net profit margin of -0.74%. The gross profit margin remains healthy at 71.23%, but the net losses are a concern. EBIT and EBITDA margins are moderate, suggesting operational efficiency but not translating into net profitability.

Balance Sheet

The company's balance sheet is relatively stable with a debt-to-equity ratio of 0.38, indicating a conservative leverage position. However, the return on equity is negative at -0.50%, reflecting challenges in generating returns for shareholders. The equity ratio is strong, suggesting a solid capital structure, but the negative ROE highlights profitability issues.

Cash Flow

Cash flow analysis reveals a decline in free cash flow growth by -116.1%, which is concerning. The operating cash flow to net income ratio is 0.28, indicating that cash generation from operations is not fully covering net losses. The free cash flow to net income ratio is high at 0.92, suggesting that despite net losses, the company is generating substantial free cash flow.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	10.15B	6.01B	5.83B	5.54B	5.31B	4.00B
Gross Profit	6.79B	4.46B	4.25B	4.01B	2.58B	2.22B
EBITDA	1.05B	760.00M	1.43B	1.42B	594.00M	348.00M
Net Income	-199.00M	-210.00M	164.00M	252.00M	-455.00M	-96.00M
Balance Sheet
Total Assets	20.21B	18.07B	17.50B	18.77B	17.44B	10.80B
Cash, Cash Equivalents and Short-Term Investments	1.22B	3.54B	2.96B	4.73B	943.00M	1.15B
Total Debt	6.85B	753.00M	708.00M	771.00M	2.77B	3.08B
Total Liabilities	8.99B	4.33B	3.79B	4.83B	7.51B	5.58B
Stockholders Equity	11.21B	13.74B	13.71B	13.93B	8.00B	3.84B
Cash Flow
Free Cash Flow	1.02B	1.24B	1.05B	634.00M	54.00M	62.00M
Operating Cash Flow	1.21B	1.34B	1.26B	868.00M	306.00M	270.00M
Investing Cash Flow	-7.48B	-551.00M	-2.35B	-636.00M	-3.37B	-2.47B
Financing Cash Flow	4.35B	-388.00M	-536.00M	-4.97B	2.81B	1.56B

Modern Times Group AB Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 110.50
• 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 SE:MTG.B, the sentiment is Negative. The current price of 110.5 is above the 20-day moving average (MA) of 107.62, below the 50-day MA of 111.50, and below the 200-day MA of 110.93, indicating a bearish trend. The MACD of -1.99 indicates Positive momentum. The RSI at 35.62 is Neutral, neither overbought nor oversold. The STOCH value of 30.27 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
G5EN	74 Outperform	kr768.55M	11.13	12.65%	9.28%	-14.68%	-29.97%
EMBRAC.B	64 Neutral	kr11.14B	1.35	10.27%	―	-46.66%	―
PDX	61 Neutral	kr13.68B	109.03	22.69%	3.16%	-18.54%	71.38%
Sector *	55 Neutral	$6.65B	3.83	-15.92%	6.20%	10.91%	7.18%
MTG.B	55 Neutral	kr12.71B	-61.64	-1.61%	―	72.20%	-166.05%
SF	52 Neutral	kr2.84B	-0.38	―	―	-11.82%	-7499.16%
EG7	49 Neutral	kr1.09B	-6.25	―	―	1.74%	-5214.06%