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Paradox Interactive AB (SE:PDX)
:PDX
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Paradox Interactive AB
(PDX)
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Rating:67Neutral
Price Target:
kr175.00
▲(14.98% 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 (PDX) vs. iShares MSCI Sweden ETF (EWD)
Market Cap
kr16.08B
Dividend Yield3.16%
Average Volume (3M)76.68K
Price to Earnings (P/E)25.2
Beta (1Y)0.55
Revenue Growth-18.54%
EPS Growth71.38%
CountrySE
Employees596
SectorCommunication Services
Sector Strength97
IndustryElectronic Gaming & Multimedia
Share Statistics
EPS (TTM)0.88
Shares Outstanding105,623,024
10 Day Avg. Volume105,035
30 Day Avg. Volume76,677
Financial Highlights & Ratios
PEG Ratio3.58
Price to Book (P/B)7.46
Price to Sales (P/S)9.86
P/FCF Ratio41.73
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
kr173.64Price Target Upside14.09% Upside
Rating ConsensusHold
Number of Analyst Covering3
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
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 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 Earnings Call Summary
Earnings Call Date:Oct 23, 2025
(Q3-2025)
| % Change Since: |
Next Earnings Date:Jan 29, 2026
Earnings Call Sentiment Neutral
The earnings call highlighted strong player engagement and successful expansions, yet faced challenges with decreased revenue and profit margins, as well as unfavorable currency exchange impacts. Despite a positive cash flow, increased costs and a reliance on Q4 releases present concerns.Q3-2025 Updates
Positive Updates
Positive Player Engagement for Key Titles
Age of Wonders 4 and Victoria 3 have shown very positive player numbers, retention rates, and sales numbers for DLCs, indicating strong ongoing engagement.
Strong Launch of Vampire: The Masquerade - Bloodlines 2
The recent release of Vampire: The Masquerade - Bloodlines 2 received positive initial feedback from players.
Expansion and DLC Success
A wide array of expansions and DLCs for key franchises such as Cities: Skylines, Crusader Kings III, Hearts of Iron IV, Age of Wonders 4, and Stellaris were released, enhancing the product offering.
Employee Growth and Expansion
The company increased its workforce from 584 to 654 employees, mainly due to the acquisition of Haemimont Games and growth in studios abroad.
Healthy Cash Flow
Positive cash flow from operating activities was SEK 195 million, up from SEK 154 million in the previous year.
Negative Updates
Revenue and Profit Decline
Revenues in Q3 2025 were SEK 395 million, down 9% from SEK 434 million in Q3 2024. Operating profit also decreased from SEK 143 million to SEK 112 million.
Currency Exchange Impact
The stronger kroner and weaker dollar and euro compared to last year had a negative impact on revenue.
Increased Costs
Selling expenses increased from SEK 44 million to SEK 50 million, and administrative expenses rose to SEK 29 million due to onetime events such as a staff conference.
Concentration of Releases in Q4
Q3 was slow with a decrease in releases, leading to anticipated heavier reliance on Q4 to meet financial targets.
Company Guidance
In the third quarter of 2025, Paradox Interactive reported revenues of SEK 395 million, a 9% decrease from the SEK 434 million in the same quarter last year, influenced by fewer releases and currency fluctuations, notably a 9% decrease in the dollar and a 3% decrease in the euro. The operating profit stood at SEK 112 million, down from SEK 143 million the previous year, with a profit margin of 29% compared to 35% last year. The company's equity to asset ratio slightly decreased from 80% to 78% due to an extended lease contract. The average number of employees rose to 654, largely due to the acquisition of Haemimont Games. Cash flow from operating activities was positive, at SEK 195 million, and there were substantial investments in game development, totaling SEK 182 million for the quarter. The guidance highlighted a busy upcoming quarter with two new base game releases, including Europa Universalis V and a remaster of Surviving Mars, alongside several DLCs and content creator packs.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
Negative
152.20
Price Trends
166.10
Negative
170.49
Negative
176.32
Negative
Market Momentum
-3.26
Positive
32.22
Neutral
21.73
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SE:PDX, the sentiment is Negative. The current price of 152.2 is below the 20-day moving average (MA) of 160.15, below the 50-day MA of 166.10, and below the 200-day MA of 176.32, indicating a bearish trend. The MACD of -3.26 indicates Positive momentum. The RSI at 32.22 is Neutral, neither overbought nor oversold. The STOCH value of 21.73 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SE:PDX.
Paradox Interactive AB Peers Comparison
UnderperformOutperform
Sector (60)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | kr772.65M | 11.19 | 12.65% | 9.28% | -14.68% | -29.97% | |
67 Neutral | kr16.08B | 25.21 | 22.69% | 3.16% | -18.54% | 71.38% | |
64 Neutral | kr12.01B | 1.46 | 10.27% | ― | -46.66% | ― | |
60 Neutral | $48.67B | 4.58 | -11.27% | 4.14% | 2.83% | -41.78% | |
55 Neutral | kr12.57B | -64.24 | -1.61% | ― | 72.20% | -166.05% | |
52 Neutral | kr2.84B | -0.38 | ― | ― | -11.82% | -7499.16% | |
49 Neutral | kr1.14B | -6.57 | ― | ― | 1.74% | -5214.06% |
* Communication Services Sector Average
SE:PDX
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-53.06
-25.85%
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Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.