UBISOFT Entertainment (UBSFY) AI Stock Analysis

• Market Cap: $1.41B
• Dividend Yield: N/A
• Average Volume (3M): 4.16K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.53
• Revenue Growth: 13.26%
• EPS Growth: 83.01%
• Country: US
• Employees: 18,666
• Sector: Communication Services
• Sector Strength: 87
• Industry: Electronic Gaming & Multimedia
• EPS (TTM): 0.23
• Shares Outstanding: 657,414,860
• 10 Day Avg. Volume: 0
• 30 Day Avg. Volume: 4,164
• PEG Ratio: -0.12
• Price to Book (P/B): 1.30
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -5.25
• 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: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0

• Rating: 56 Neutral
• Price Target: ―

Ubisoft's stock score reflects its recovery trajectory with revenue growth and operational improvements. However, the company's history of profitability issues, negative cash flow, and a challenging valuation dampen the overall score. Short-term positive momentum is evident, but caution is advised due to potential overvaluation concerns.

UBISOFT Entertainment Business Overview & Revenue Model

Company Description

Ubisoft Entertainment SA produce, publishes, and distributes video games for consoles, PC, smartphones, and tablets in both physical and digital formats in Europe, North America, and internationally. The company designs and develops software, including scenarios, animation, gameplay, layouts, and game rules, as well as develops design tools and game engines. It is also involved in the development in the area of online and mobile gaming; and film business. The company was incorporated in 1986 and is headquartered in Saint-Mandé, France.

How the Company Makes Money

Ubisoft primarily generates revenue through the sale of video games, which includes both physical copies and digital downloads. The company employs a multi-platform strategy, releasing its titles on consoles, PCs, and mobile devices. A significant portion of revenue comes from the sale of new game releases and additional content, such as downloadable content (DLC), season passes, and in-game microtransactions. Ubisoft also benefits from recurring revenue streams through its online services and subscriptions, such as Ubisoft+, which offers access to a broad library of games for a monthly fee. Additionally, the company engages in partnerships and collaborations with other technology and entertainment firms to expand its reach and enhance its offerings. Key revenue streams include direct sales to consumers, digital distribution platforms, and partnerships with retail and online marketplaces.

UBISOFT Entertainment Financial Statement Overview

Summary

Ubisoft demonstrates strong recovery with a 26.8% revenue growth and robust gross profit margin of 91.1%. However, past profitability volatility, moderate leverage, and cash flow issues, including negative free cash flow, are concerns that need addressing for sustainable growth.

Income Statement

Ubisoft has shown a strong recovery in revenue with a 26.8% growth from 2023 to 2024. The gross profit margin remains robust at 91.1%, indicating efficient cost management, but the net profit margin improved only modestly to 6.9% after a significant loss in 2023. The EBIT margin rebounded to 13.6%, and the EBITDA margin is healthy at 48.0%, reflecting improved operational performance. Overall, the company is recovering well, but the past volatility in profitability is a concern.

Balance Sheet

The debt-to-equity ratio stands at 1.34, suggesting moderate leverage, which is manageable given the industry norms. Return on equity improved significantly to 8.4%, reflecting better profitability. The equity ratio of 36.6% indicates a balanced funding structure but shows a declining trend in equity proportion over the years. The company needs to maintain control over its leverage to ensure financial stability.

Cash Flow

Free cash flow remains negative, though the growth rate from 2023 to 2024 is not favorable, which is a concern for liquidity. The operating cash flow to net income ratio is 3.41, indicating strong cash generation compared to net income. However, the free cash flow to net income ratio is negative, highlighting ongoing cash utilization issues. Overall, cash flow management is crucial for future financial health.

Breakdown
TTM	Mar 2024	Mar 2023	Mar 2022	Mar 2021	Mar 2020
Income Statement		Total Revenue
2.14B	2.30B	1.81B	2.13B	2.22B	1.59B
	Gross Profit
1.93B	2.10B	1.60B	1.86B	1.90B	1.34B
	EBIT
25.70M	313.60M	-585.80M	241.50M	289.40M	-59.50M
	EBITDA
103.80M	1.11B	719.30M	898.40M	915.00M	558.90M
	Net Income Common Stockholders
-54.60M	157.80M	-494.20M	79.10M	103.10M	-125.62M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
1.05B	1.21B	1.49B	1.45B	1.87B	1.08B
	Total Assets
3.29B	5.12B	4.67B	4.96B	4.88B	3.60B
	Total Debt
1.34B	2.51B	2.46B	2.07B	2.09B	1.42B
	Net Debt
293.77M	1.30B	971.10M	617.70M	467.20M	343.63M
	Total Liabilities
2.37B	3.24B	3.19B	3.15B	3.22B	2.28B
	Stockholders Equity
920.02M	1.88B	1.48B	1.81B	1.66B	1.31B
Cash Flow		Free Cash Flow
598.60M	-465.60M	-425.80M	-282.20M	107.90M	-155.75M
	Operating Cash Flow
627.40M	537.60M	-354.20M	-191.60M	957.90M	600.36M
	Investing Cash Flow
-943.10M	-1.01B	-107.90M	-152.00M	-868.20M	-904.87M
	Financing Cash Flow
-28.30M	204.70M	588.60M	139.90M	463.80M	431.54M

UBISOFT Entertainment Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 2.13
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For UBSFY, the sentiment is Negative. The current price of 2.13 is below the 20-day moving average (MA) of 2.25, below the 50-day MA of 2.26, and below the 200-day MA of 2.58, indicating a bearish trend. The MACD of -0.04 indicates Positive momentum. The RSI at 43.97 is Neutral, neither overbought nor oversold. The STOCH value of 19.26 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for UBSFY.

UBISOFT Entertainment Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
DDI	75 Outperform	$451.93M	3.75	13.91%	―	10.71%	21.74%
FUBO	73 Outperform	$1.11B	16.61	21.67%	―	13.18%	―
PLTK	63 Neutral	$1.78B	12.64	-220.61%	8.44%	1.64%	-32.31%
CURI	62 Neutral	$277.58M	―	-12.13%	6.65%	-4.04%	84.17%
Sector *	61 Neutral	$14.74B	5.97	-3.99%	6.57%	2.79%	-32.84%
MYPS	57 Neutral	$178.77M	―	-11.64%	―	-11.11%	-90.96%
UBSFY	56 Neutral	$1.41B	―	-8.84%	―	13.26%	83.01%