Structured Assessment — Evolution AB (EVO)
Factor-by-factor (row format)
Technical / Timing Strong downtrend after many years of growth. Price reached a good zone, but downside risk remains. Score: 6 / 10
Financials (Debt / Cash) No debt (Debt/Equity 0%). Cash around €656m. Interest coverage ~172x. Very strong balance sheet. Score: 9 / 10
Valuation P/E ~10 vs fair ~15.7. Clearly cheaper than history. 54% undervaluation looks stretched, but a real discount exists. Score: 8 / 10
Growth Trajectory Company is in a mature phase. Expected growth ~3–6% per year. Not a growth story anymore. Score: 5 / 10
Current Profitability Exceptionally high margins. Net margin ~50%. Operating margin ~66%+. Elite profitability. Score: 9 / 10
Competition / Moat Absolute leader in live casino (~60% market share). Strong and proven moat. Score: 9 / 10
B2B Stickiness Infrastructure-level B2B business. Casinos depend on EVO tech. Switching costs are real. Score: 8 / 10
Insiders / Buybacks / Dividends Dividend yield ~4.8%. Insider buying in summer. Capital returns are solid. Score: 7 / 10
Risks / Volatility Regulation (UK, Asia). Legal issues, operational incidents. Reputation risk is material. Score: 4 / 10
Margin of Safety Strong cash flow. No leverage. Can absorb shocks. Score: 8 / 10
Strategy Execution Core business still strong. Asia weakened. Margins below peak levels. Score: 6 / 10
Total Score
79 / 110
Implied Success Probability
≈ 71.8%
Final Verdict (short and hard)
What this case is: Not growth. This is quality + cash flow + dividends, priced with a regulatory discount.
Pros
- Exceptional business quality.
- Real moat.
- Margins almost nobody has.
- Zero debt.
- Real dividends.
- Infrastructure player. Quiet power.
Cons
- Growth is no longer the driver.
- Regulatory risks are real, not theoretical.
- Asia and UK can keep pressure on results.
- Reputation shocks matter in this sector.
Bottom line: A high-quality cash machine. Returns come from stability and yield, not expansion. You buy this for durability, not excitement.
Have other thoughts on Evolution?
Create your own narrative on this stock, and estimate its Fair Value using our Valuator tool.
Create NarrativeHow well do narratives help inform your perspective?
Disclaimer
The user cjimi holds no position in OM:EVO. Simply Wall St has no position in any of the companies mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The author of this narrative is not affiliated with, nor authorised by Simply Wall St as a sub-authorised representative. This narrative is general in nature and explores scenarios and estimates created by the author. The narrative does not reflect the opinions of Simply Wall St, and the views expressed are the opinion of the author alone, acting on their own behalf. These scenarios are not indicative of the company's future performance and are exploratory in the ideas they cover. The fair value estimates are estimations only, and does not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that the author's analysis may not factor in the latest price-sensitive company announcements or qualitative material.
