Paradox Interactive AB (PDX) AI Stock Analysis

• Market Cap: $18.96B
• Dividend Yield: 2.88%
• Average Volume (3M): 76.68K
• Price to Earnings (P/E): 29.7
• Beta (1Y): 0.63
• Revenue Growth: -18.54%
• EPS Growth: 71.38%
• Country: SE
• Employees: 596
• Sector: Communication Services
• Sector Strength: 97
• Industry: Electronic Gaming & Multimedia
• EPS (TTM): 0.88
• Shares Outstanding: 105,623,024
• 10 Day Avg. Volume: 105,035
• 30 Day Avg. Volume: 76,677
• PEG Ratio: 3.58
• Price to Book (P/B): 7.46
• Price to Sales (P/S): 9.86
• P/FCF Ratio: 41.73
• Enterprise Value/Market Cap: 1.01
• Enterprise Value/Revenue: 9.25
• Enterprise Value/Gross Profit: 16.90
• Enterprise Value/Ebitda: 14.77
• 1Y Price Target: $162.38
• Price Target Upside: -7.47% Downside
• Rating Consensus: Moderate Sell
• Number of Analyst Covering: 3
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 71 Outperform
• Price Target: kr202.00 ▲(15.10% Upside)

Paradox Interactive AB's overall score reflects strong financial performance and profitability, despite challenges with declining revenue and free cash flow. Technical indicators suggest cautious sentiment, while valuation metrics indicate potential overvaluation. The earnings call provided mixed signals with strong player engagement but declining revenue and profit margins.

Paradox Interactive AB Business Overview & Revenue Model

Company Description

Paradox Interactive AB (publ) develops and publishes games and brands for PC, mobile, and console platforms primarily in North and Latin America, Europe, the Middle East, Africa, and the Asia Pacific region. The company's game portfolio comprises various franchises and brands, including Stellaris, Europa Universalis, Hearts of Iron, Crusader Kings, Cities: Skylines, Surviving Mars, Prison Architect, Magicka, Age of Wonders, Victoria, and the World of Darkness. Paradox Interactive AB (publ) was founded in 1998 and is headquartered in Stockholm, Sweden.

How the Company Makes Money

Paradox Interactive generates revenue through several key streams: game sales, downloadable content (DLC), and expansions. The company releases both physical and digital versions of its games, with digital sales accounting for a significant portion of revenue due to the rise of online gaming platforms. PDX strategically develops and sells DLCs and expansions that enhance the core gaming experience, encouraging players to invest further in their favorite titles. Additionally, Paradox Interactive often engages in partnerships with other developers and publishers to co-create or distribute games, expanding its reach and revenue potential. The company's ongoing commitment to community engagement and support for modding also fosters a loyal customer base, which translates to sustained sales over time.

Paradox Interactive AB Financial Statement Overview

Summary

Paradox Interactive AB demonstrates strong profitability with a solid EBIT margin and net profit margin. The balance sheet is robust with minimal leverage, but there are concerns about declining revenue and free cash flow.

Income Statement

Paradox Interactive AB shows a strong profitability profile with a solid EBIT margin of 33.82% and a net profit margin of 26.64% for the TTM. However, the company experienced a revenue decline of 5.37% in the TTM, indicating potential challenges in maintaining growth. The gross profit margin remains healthy at 46.76%, suggesting efficient cost management.

Balance Sheet

The company's balance sheet is robust, with a low debt-to-equity ratio of 0.018, indicating minimal leverage and financial risk. The return on equity (ROE) is strong at 21.15%, reflecting effective use of equity to generate profits. The equity ratio is not explicitly calculated, but the high stockholders' equity suggests a stable financial position.

Cash Flow

Cash flow analysis reveals a decline in free cash flow growth by 20.58% in the TTM, which could be a concern. However, the operating cash flow to net income ratio of 3.09 indicates strong cash generation relative to net income. The free cash flow to net income ratio of 0.75 suggests good cash conversion efficiency.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	2.07B	2.20B	2.64B	1.97B	1.45B	1.79B
Gross Profit	1.13B	997.29M	1.25B	1.11B	566.49M	988.15M
EBITDA	1.29B	1.47B	1.67B	1.36B	431.50M	757.31M
Net Income	664.47M	584.63M	530.63M	708.71M	247.77M	490.57M
Balance Sheet
Total Assets	3.24B	3.53B	3.58B	3.14B	2.52B	2.52B
Cash, Cash Equivalents and Short-Term Investments	1.02B	1.47B	1.30B	747.51M	599.72M	767.56M
Total Debt	45.09M	64.79M	108.58M	140.46M	168.97M	201.90M
Total Liabilities	625.63M	622.71M	959.67M	849.05M	861.13M	1.01B
Stockholders Equity	2.61B	2.91B	2.62B	2.29B	1.66B	1.51B
Cash Flow
Free Cash Flow	748.28M	519.85M	745.64M	288.85M	-12.66M	484.75M
Operating Cash Flow	1.12B	1.12B	1.45B	1.08B	736.59M	1.13B
Investing Cash Flow	-699.03M	-403.22M	-848.28M	-806.97M	-766.57M	-758.37M
Financing Cash Flow	-566.76M	-355.17M	-248.96M	-140.97M	-139.59M	-148.48M

Paradox Interactive AB Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 175.50
• 50DMA: Positive
• 100DMA: Positive
• 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:PDX, the sentiment is Positive. The current price of 175.5 is above the 20-day moving average (MA) of 171.47, above the 50-day MA of 174.29, and below the 200-day MA of 183.50, indicating a neutral trend. The MACD of 0.84 indicates Negative momentum. The RSI at 53.64 is Neutral, neither overbought nor oversold. The STOCH value of 51.05 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SE:PDX.

Paradox Interactive AB Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
G5EN	74 Outperform	$752.18M	9.34	12.65%	8.88%	-14.68%	-29.97%
PDX	71 Outperform	$18.96B	29.73	22.69%	2.88%	-18.54%	71.38%
EG7	64 Neutral	kr1.44B	-6.45	―	―	5.10%	-623.00%
MTG.B	61 Neutral	kr14.25B	-220.60	-0.52%	―	44.55%	-8.92%
Sector *	60 Neutral	$48.67B	4.58	-11.27%	4.14%	2.83%	-41.78%
EMBRAC.B	59 Neutral	$22.15B	2.82	9.51%	―	-37.87%	―
SF	51 Neutral	kr3.37B	-0.45	―	―	-11.82%	-7499.16%

Paradox Interactive AB Corporate Events

Paradox Interactive Reports Q3 2025 Financial Results

Paradox Interactive is a leading developer and publisher in the strategy and management gaming sector, known for its long-lived games with downloadable content and a strong player community. The company operates through a publishing business and six studios across six countries, catering to six million monthly active players.

Paradox Interactive’s Earnings Call: Engagement Up, Revenue Down

The recent earnings call for Paradox Interactive presented a mixed sentiment. While the company celebrated strong player engagement and successful expansions, it faced challenges with decreased revenue and profit margins, as well as unfavorable currency exchange impacts. Despite maintaining a positive cash flow, concerns were raised regarding increased costs and a reliance on Q4 releases to meet financial targets.

Paradox Interactive Reports Mixed Financial Results for 2025

Paradox Interactive is a leading developer and publisher of strategy and management games for PC and consoles, known for its long-lived games with downloadable content and a strong relationship with its player base. In its latest earnings report for the first half of 2025, Paradox Interactive reported a 20% decline in revenues for the second quarter compared to the same period last year, amounting to MSEK 458.6. Despite the revenue drop, the company saw a significant increase in operating profit, which rose by 360% to MSEK 133.0, largely due to the absence of last year’s write-downs. Profit after tax also increased to MSEK 110.3 from MSEK 27.3 in the previous year. The company attributed its revenue primarily to its popular titles such as Age of Wonders 4, Cities: Skylines, and Crusader Kings III. Paradox Interactive announced several strategic developments, including the upcoming release of Europa Universalis V and Vampire: The Masquerade – Bloodlines 2, which are expected to bolster future revenues. The company also released new downloadable content for several games, enhancing its portfolio. Looking ahead, Paradox Interactive remains optimistic about its future, with a strong lineup of upcoming releases and a focus on maintaining profitability. The company is confident in its business model and anticipates continued growth and stability in the coming quarters.