Opinions
Jason Del Vicario
EVOLUTION GAMING GROUP AB
EVO-STO
TOP PICK
May 27, 2024
Stock price when the opinion was issued
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Strong business with high margins. Largest casino in the world with white label products online. Excellent cash flow with great management team. Recent weakness in share price presenting good buying opportunity. Excellent long term value. Founder led & founder owned.
Swedish online gaming business. World's largest casino. Asset light business with high return on equity. Huge number of customers. Extremely profitable business model. Founder led and owned. Zero debt levels, and also pays a dividend. Will be a long term hold. Would recommend buying at current price.
Stock chart looks ugly. But it's a predictable business, so that means the forward rate of return is going up. Trades at about 10x PE, buying back shares. Continues to gain market share, currently ~60-70% globally. Very much out of favour, and exactly the type of opportunity he looks for. He added more in February. Size your position accordingly; his is 5%.
About half of earnings are from unregulated markets, but those users were accessing regulated markets. UK represents about only 3% of revenues, but its gaming commission investigated that issue. Cyberattack. Employee unrest in Georgia. He feels these are short-term glitches. Yield is 4%.
Technically, the largest casino in the world. Provides online backbone for land-based casinos and online casinos. Based in Sweden. Founder run and owned. Trading at 19x PE. Strong moat, in part because product quality is so high.
(Analysts’ price target is $1479.13)No debt. Margins are some of the highest he's ever seen, in 60% range. Growing earnings rapidly in 20-30% range, though that's come down a bit from 40%. A 4% weighting for his portfolio. (Price target is in Swedish krona.) Yield is 2.7%.