Paradox Interactive AB (PDX) AI Stock Analysis

• Market Cap: $18.96B
• Dividend Yield: 3.1%
• 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: 9.42
• Enterprise Value/Gross Profit: 17.33
• Enterprise Value/Ebitda: 15.56
• 1Y Price Target: $174.37
• Price Target Upside: -0.25% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 3
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 67 Neutral
• Price Target: kr175.00 ▲(0.11% Upside)

Paradox Interactive AB's strong financial performance and positive earnings call sentiment are offset by bearish technical indicators and a high P/E ratio. The company's robust profitability and cash flow are significant strengths, but the current market sentiment and valuation concerns weigh on the overall score.

Positive Factors

Strong Profit Margins

High profit margins indicate efficient cost management and a strong ability to convert sales into actual profit, supporting long-term financial health.

Cash Flow Strength

Robust cash flow supports ongoing operations and investments in game development, ensuring the company can sustain growth and manage financial obligations.

Player Engagement

Strong player engagement for key titles suggests a loyal customer base, which can lead to sustained revenue through game sales and DLCs.

Negative Factors

Revenue Decline

A decline in revenue indicates potential challenges in maintaining sales momentum, which could affect long-term growth prospects if not addressed.

Increased Costs

Rising costs, if not managed, can erode profit margins and impact overall profitability, necessitating strategic cost control measures.

Currency Exchange Impact

Adverse currency fluctuations can affect international revenue, posing a risk to financial performance if exchange rates remain unfavorable.

Paradox Interactive AB Business Overview & Revenue Model

Company Description

Paradox Interactive AB (PDX) is a Swedish video game publisher and developer renowned for its deep and complex strategy games. Founded in 1999, the company operates primarily in the interactive entertainment sector, focusing on genres such as grand strategy, simulation, and role-playing games. PDX is best known for its flagship titles, including the 'Crusader Kings', 'Europa Universalis', and 'Hearts of Iron' series, which cater to a dedicated fan base seeking intricate gameplay and historical accuracy. The company also engages in the development of expansions and downloadable content (DLC) for its games, enhancing user experience and longevity of its titles.

How the Company Makes Money

Paradox Interactive generates revenue through multiple streams, primarily from game sales, which include both physical and digital copies of its titles. The company has a robust model of releasing expansions and downloadable content (DLC) that provide additional gameplay, storylines, and features, which are often sold at a premium price, significantly boosting revenue from existing games. Additionally, Paradox employs a subscription model for some of its products, allowing players to access a library of games for a monthly fee. The company benefits from a strong presence on digital distribution platforms such as Steam and its own Paradox Store, which facilitates direct sales to consumers. Collaborations and partnerships with other developers and publishers also contribute to its revenue, as does merchandise linked to its popular franchises. Overall, the combination of game sales, DLC, subscriptions, and strategic partnerships forms the cornerstone of Paradox Interactive's financial success.

Paradox Interactive AB Financial Statement Overview

Summary

Paradox Interactive AB demonstrates strong profitability with solid EBIT and net profit margins. However, declining revenue and free cash flow are concerns, despite a robust balance sheet with minimal leverage.

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	2.03B	2.20B	2.64B	1.97B	1.45B	1.79B
Gross Profit	1.10B	997.29M	1.25B	1.11B	566.49M	988.15M
EBITDA	1.23B	1.47B	1.69B	1.36B	431.50M	757.31M
Net Income	637.67M	584.63M	530.63M	708.71M	247.77M	490.57M
Balance Sheet
Total Assets	3.47B	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	175.19M	64.79M	108.58M	140.46M	168.97M	201.90M
Total Liabilities	765.12M	622.71M	959.67M	849.05M	861.13M	1.01B
Stockholders Equity	2.70B	2.91B	2.62B	2.29B	1.66B	1.51B
Cash Flow
Free Cash Flow	797.81M	519.85M	745.64M	288.85M	-12.66M	484.75M
Operating Cash Flow	1.17B	1.12B	1.45B	1.08B	736.59M	1.13B
Investing Cash Flow	-766.18M	-403.22M	-848.28M	-806.97M	-766.57M	-758.37M
Financing Cash Flow	-566.96M	-355.17M	-248.96M	-140.97M	-139.59M	-148.48M

Paradox Interactive AB Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 174.80
• 50DMA: Positive
• 100DMA: Positive
• 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:PDX, the sentiment is Positive. The current price of 174.8 is above the 20-day moving average (MA) of 169.94, above the 50-day MA of 170.99, and below the 200-day MA of 180.57, indicating a neutral trend. The MACD of -2.10 indicates Positive momentum. The RSI at 57.00 is Neutral, neither overbought nor oversold. The STOCH value of 37.65 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%	9.27%	-14.68%	-29.97%
PDX	67 Neutral	$18.96B	29.73	22.69%	3.10%	-18.54%	71.38%
EMBRAC.B	62 Neutral	$22.15B	2.82	10.27%	―	-46.66%	―
Sector *	60 Neutral	$48.67B	4.58	-11.27%	4.14%	2.83%	-41.78%
MTG.B	55 Neutral	kr14.25B	-220.60	-1.61%	―	72.20%	-166.05%
SF	52 Neutral	kr3.37B	-0.45	―	―	-11.82%	-7499.16%
EG7	49 Neutral	kr1.44B	-6.45	―	―	1.74%	-5214.06%

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.