Paradox Interactive AB (PDX) AI Stock Analysis

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SE:PDX Dividends

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Paradox Interactive AB

(OTC:PDX)

74Outperform

Paradox Interactive's overall stock score reflects strong financial performance and effective cash flow management, which are slightly offset by recent revenue declines and high valuation metrics. The strategic acquisitions and strong cash flow provide optimism for future growth, while technical indicators suggest a need for caution in the short term due to potential overvaluation and mixed momentum signals.

Paradox Interactive AB (PDX) vs. S&P 500 (SPY)

Market Cap

$21.44B

Dividend Yield1.32%

Average Volume (3M)77.33K

Price to Earnings (P/E)36.6

Beta (1Y)0.73

Revenue Growth-17.38%

EPS Growth8.93%

CountrySE

Employees596

SectorCommunication Services

Sector Strength84

IndustryElectronic Gaming & Multimedia

Share Statistics

EPS (TTM)1.17

Shares Outstanding105,623,024

10 Day Avg. Volume89,469

30 Day Avg. Volume77,331

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)0.00

Price to Cash Flow (P/CF)0.00

P/FCF Ratio0.00

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$194.59

Price Target Upside-3.86% Downside

Rating ConsensusHold

Number of Analyst Covering4

Paradox Interactive AB Business Overview & Revenue Model

Company DescriptionParadox 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 MoneyParadox Interactive generates revenue primarily through the sale of its video games, which are available on multiple platforms including PC, consoles, and mobile devices. The company's business model includes direct sales through digital distribution channels, such as Steam, as well as physical game sales. A significant portion of Paradox's revenue comes from downloadable content (DLC) and expansions for its games, which extend the life and engagement of the base games. Additionally, Paradox Interactive benefits from partnerships and collaborations with other game developers and publishers to expand its market reach. The company also engages in licensing agreements and merchandise sales, contributing to its diversified revenue streams.

Paradox Interactive AB Financial Statement Overview

Summary

Paradox Interactive shows a strong financial position with notable profitability, minimal leverage, and efficient cash flow management. While revenue has slightly declined recently, the company maintains solid margins and a strong equity base, ensuring stability and potential for long-term growth. Continued focus on revenue growth will be crucial to sustaining its financial strength.

Income Statement

Positive

Paradox Interactive's TTM (Trailing-Twelve-Months) income statement shows strong profitability with a gross profit margin of 46.76% and a net profit margin of 26.65%. While there is a slight decline in total revenue compared to the previous annual period, the company has maintained healthy EBIT and EBITDA margins at 33.66% and 64.23%, respectively. However, the recent revenue growth rate is negative, which could be a concern if it continues.

Balance Sheet

Positive

The company's balance sheet is robust, with a strong equity position. The equity ratio stands at 83.45%, indicating financial stability. The debt-to-equity ratio is low at 0.02, reflecting minimal leverage. Return on equity is impressive at 19.23%, showcasing efficient use of equity. Overall, Paradox Interactive maintains a healthy balance sheet with solid equity backing.

Cash Flow

Very Positive

Cash flow analysis reflects strong operational efficiency with an operating cash flow to net income ratio of 2.15, indicating robust cash generation from operations. The free cash flow to net income ratio is 1.62, underscoring effective capital management. The company has also achieved substantial free cash flow growth of 81.23% over the previous annual period, strengthening its financial flexibility.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
2.20B	2.64B	1.97B	1.45B	1.79B
	Gross Profit
997.29M	1.25B	1.11B	566.49M	988.15M
	EBIT
721.36M	657.87M	887.15M	307.45M	632.11M
	EBITDA
1.47B	1.67B	1.36B	431.50M	757.31M
	Net Income Common Stockholders
584.63M	530.63M	708.71M	247.77M	490.57M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
1.47B	1.30B	747.51M	599.72M	767.56M
	Total Assets
3.53B	3.58B	3.14B	2.52B	2.52B
	Total Debt
64.79M	108.58M	140.46M	168.97M	201.90M
	Net Debt
-1.40B	-989.45M	-607.04M	-430.75M	-565.66M
	Total Liabilities
622.71M	959.67M	849.05M	861.13M	1.01B
	Stockholders Equity
2.91B	2.62B	2.29B	1.66B	1.51B
Cash Flow		Free Cash Flow
519.85M	745.64M	288.85M	-12.66M	484.75M
	Operating Cash Flow
1.12B	1.45B	1.08B	736.59M	1.13B
	Investing Cash Flow
-403.22M	-848.28M	-806.97M	-766.57M	-758.37M
	Financing Cash Flow
-355.17M	-248.96M	-140.97M	-139.59M	-148.48M

Paradox Interactive AB Technical Analysis

Technical Analysis Sentiment

Positive

Last Price202.40

Price Trends

50DMA

187.79

Positive

100DMA

198.98

Positive

200DMA

185.60

Positive

Market Momentum

MACD

4.08

Negative

RSI

69.55

Neutral

STOCH

96.60

Negative

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 202.4 is above the 20-day moving average (MA) of 181.68, above the 50-day MA of 187.79, and above the 200-day MA of 185.60, indicating a bullish trend. The MACD of 4.08 indicates Negative momentum. The RSI at 69.55 is Neutral, neither overbought nor oversold. The STOCH value of 96.60 is Negative, 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

Overall Rating

UnderperformOutperform

Sector (60)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PDX	74 Outperform	$21.44B	36.59	19.48%	1.32%	-17.38%	8.93%
Sector *	60 Neutral	$13.74B	7.25	-2.74%	3.81%	2.21%	-37.97%

* Communication Services Sector Average

Performance Comparison

SE:PDX

Paradox Interactive AB

202.40

40.97

25.38%

GENTF

G5 Entertainment AB

12.72

1.14

9.84%

STBEF

Starbreeze AB

0.02

0.01

100.00%

THQQF

Embracer Group AB

11.23

6.86

156.98%

DE:5WF

Gaming Corps AB

0.08

0.00

0.00%

DE:5ZD0

Fragbite Group AB

0.55

-2.74

-83.28%

Paradox Interactive AB Earnings Call Summary

Earnings Call Date:Apr 24, 2025

(Q1-2025)

% Change Since: 13.45%|

Next Earnings Date:Aug 07, 2025

Earnings Call Sentiment Neutral

The quarter was characterized by stable financial management and strategic acquisitions despite lower revenue and profit figures due to fewer releases and currency challenges.

Q1-2025 Updates

Positive Updates

Acquisition of Haemimont Games

Completed the acquisition of Haemimont Games to expand into the management segment of games, along with acquiring publishing rights for Stranded: Alien Dawn.

Strong Cash Flow

Cash flow from operating activities was SEK266 million in Q1 2025, compared to SEK137 million in Q1 2024, showing strong cash management.

Equity Through Asset Ratio Improvement

The equity through asset ratio improved to 83% from 78% last year.

Stable Operating Profit Margin

Operating profit margin was 33% in Q1 2025 compared to 34% in Q1 2024, showing stability despite lower revenues.

Negative Updates

Decrease in Revenue

Revenues in Q1 2025 were SEK464 million, a decrease of 4% from SEK482 million in Q1 2024, attributed to fewer releases this year.

Currency Headwinds

Experienced negative currency impacts due to the strengthening of SEK against the USD, affecting the financial performance negatively.

Lower Operating Profit

Operating profit for Q1 2025 was SEK147 million, compared to SEK154 million in Q1 2024, reflecting the slower quarter.

Company Guidance

In the Q1 2025 earnings call for Paradox Interactive, several key financial metrics and strategic movements were highlighted. The company reported revenues of SEK464 million, a 4% decrease from SEK482 million in Q1 2024. Operating profit also saw a slight decline to SEK147 million from SEK154 million the previous year. However, despite fewer releases contributing to lower revenue, the company maintained a strong cash flow of SEK266 million from operating activities, up from SEK137 million in the same period last year. Notably, Paradox completed the acquisition of Haemimont Games, aligning with their strategy to expand into the management games segment. In addition, they acquired the publishing rights for "Stranded: Alien Dawn" from Frontier Developments. Currency fluctuations presented headwinds, impacting revenue and resulting in a negative SEK23 million in other income and expenses. The company remains optimistic, with plans to release more content in Q2 to counteract these challenges.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

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.