Devolver Digital (AIM:DEVO) - Share price, News & Analysis

Q: What is the Fair Price of DEVO when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

DEVO (£0.61) is trading below our estimate of [[fair value]] (£2.76)

DEVO fundamental analysis
Snowflake Score
Valuation	5/6
Future Growth	1/6
Past Performance	2/6
Financial Health	6/6
Dividends	0/6

DEVO Stock Overview

Devolver Digital Inc. develops video games for release on PC and mobile in the United States and internationally.

Rewards

Trading at 77.9% below our estimate of its fair value

Revenue is forecast to grow 16.92% per year

Risk Analysis

Earnings are forecast to decline by an average of 15.7% per year for the next 3 years

Highly volatile share price over the past 3 months

Devolver Digital Competitors

tinyBuild

AIM:TBLD

UK£239.4m

Frontier Developments

AIM:FDEV

UK£634.9m

Team17 Group

AIM:TM17

UK£658.0m

Gaming Realms

AIM:GMR

UK£87.6m

Price History & Performance

Summary of all time highs, changes and price drops for Devolver Digital
Historical stock prices
Current Share Price	UK£0.61
52 Week High	UK£2.22
52 Week Low	UK£0.50
Beta	0
1 Month Change	-1.61%
3 Month Change	-57.04%
1 Year Change	n/a
3 Year Change	n/a
5 Year Change	n/a
Change since IPO	-67.03%

Recent News & Updates

Apr 06

Devolver Digital, Inc.'s (LON:DEVO) Intrinsic Value Is Potentially 80% Above Its Share Price

In this article we are going to estimate the intrinsic value of Devolver Digital, Inc. ( LON:DEVO ) by estimating the...

Shareholder Returns

	DEVO	GB Entertainment	GB Market
7D	-1.6%	3.0%	0.4%
1Y	n/a	-39.1%	-9.0%

Return vs Industry: Insufficient data to determine how DEVO performed against the UK Entertainment industry.

Return vs Market: Insufficient data to determine how DEVO performed against the UK Market.

Price Volatility

Is DEVO's price volatile compared to industry and market?
DEVO volatility
DEVO Average Weekly Movement	15.3%
Entertainment Industry Average Movement	6.1%
Market Average Movement	5.4%
10% most volatile stocks in GB Market	10.8%
10% least volatile stocks in GB Market	2.7%

Stable Share Price: DEVO is more volatile than 90% of UK stocks over the past 3 months, typically moving +/- 15% a week.

Volatility Over Time: DEVO's weekly volatility has increased from 9% to 15% over the past year.

About the Company

Founded	Employees	CEO	Website
2008	200	n/a	https://www.devolverdigital.com

Devolver Digital Inc. develops video games for release on PC and mobile in the United States and internationally. It publishes video games. The company was founded in 2008 and is based in Wilmington, Delaware.

Devolver Digital Fundamentals Summary

How do Devolver Digital's earnings and revenue compare to its market cap?
DEVO fundamental statistics
Market Cap	US$325.81m
Earnings (TTM)	US$32.37m
Revenue (TTM)	US$98.15m

10.1x

P/E Ratio

3.3x

P/S Ratio

Is DEVO overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
DEVO income statement (TTM)
Revenue	US$98.15m
Cost of Revenue	US$58.92m
Gross Profit	US$39.23m
Other Expenses	US$6.86m
Earnings	US$32.37m

Last Reported Earnings

Dec 31, 2021

Next Earnings Date

Sep 26, 2022

Earnings per share (EPS)	0.073
Gross Margin	39.97%
Net Profit Margin	32.98%
Debt/Equity Ratio	0.0%

How did DEVO perform over the long term?

See historical performance and comparison

We’ve recently updated our valuation analysis.

Valuation

Is DEVO undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

5/6

Valuation Score 5/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
Analyst Forecast

Key Valuation Metric

Which metric is best to use when looking at relative valuation for DEVO?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for DEVO. This is calculated by dividing DEVO's market cap by their current preferred multiple.
What is DEVO's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	US$325.81m

DEVO key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	2.5x
Enterprise Value/EBITDA	4.3x
PEG Ratio	-0.6x

Price to Earnings Ratio vs Peers

How does DEVO's PE Ratio compare to its peers?

DEVO PE Ratio vs Peers

The above table shows the PE ratio for DEVO vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	44.4x
TBLD tinyBuild	35x	22.3%	UK£239.4m
FDEV Frontier Developments	45x	60.5%	UK£634.9m
TM17 Team17 Group	27.7x	11.4%	UK£658.0m
GMR Gaming Realms	69.8x	n/a	UK£87.6m
DEVO Devolver Digital	10.1x	-15.7%	UK£269.8m

Price-To-Earnings vs Peers: DEVO is good value based on its Price-To-Earnings Ratio (10.1x) compared to the peer average (44.4x).

Price to Earnings Ratio vs Industry

How does DEVO's PE Ratio compare vs other companies in the European Entertainment Industry?

Price-To-Earnings vs Industry: DEVO is good value based on its Price-To-Earnings Ratio (10.1x) compared to the UK Entertainment industry average (26.4x)

Price to Earnings Ratio vs Fair Ratio

What is DEVO's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

DEVO PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	10.1x
Fair PE Ratio	14.1x

Price-To-Earnings vs Fair Ratio: DEVO is good value based on its Price-To-Earnings Ratio (10.1x) compared to the estimated Fair Price-To-Earnings Ratio (14.1x).

Share Price vs Fair Value

What is the Fair Price of DEVO when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: DEVO (£0.61) is trading below our estimate of fair value (£2.76)

Significantly Below Fair Value: DEVO is trading below fair value by more than 20%.

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Target price is more than 20% higher than the current share price, but analysts are not within a statistically confident range of agreement.

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Future Growth

How is Devolver Digital forecast to perform in the next 1 to 3 years based on estimates from 7 analysts?

Future Growth Score

1/6

Future Growth Score 1/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

-15.7%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: DEVO's earnings are forecast to decline over the next 3 years (-15.7% per year).

Earnings vs Market: DEVO's earnings are forecast to decline over the next 3 years (-15.7% per year).

High Growth Earnings: DEVO's earnings are forecast to decline over the next 3 years.

Revenue vs Market: DEVO's revenue (16.9% per year) is forecast to grow faster than the UK market (4.4% per year).

High Growth Revenue: DEVO's revenue (16.9% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: DEVO's Return on Equity is forecast to be low in 3 years time (7.6%).

Discover growth companies

Past Performance

How has Devolver Digital performed over the past 5 years?

Past Performance Score

2/6

Past Performance Score 2/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

-49.5%

Last years earnings growth

Earnings and Revenue History

Quality Earnings: DEVO has high quality earnings.

Growing Profit Margin: DEVO's current net profit margins (33%) are higher than last year (30.1%).

Past Earnings Growth Analysis

Earnings Trend: Unable to establish if DEVO's year-on-year earnings growth rate was positive over the past 5 years as it has been trading publicly for less than 3 years.

Accelerating Growth: Unable to compare DEVO's past year earnings growth to its 5-year average as it has been trading publicly for less than 3 years.

Earnings vs Industry: DEVO had negative earnings growth (-49.5%) over the past year, making it difficult to compare to the Entertainment industry average (10.9%).

Return on Equity

High ROE: DEVO's Return on Equity (13.2%) is considered low.

Discover strong past performing companies

Financial Health

How is Devolver Digital's financial position?

Financial Health Score

6/6

Financial Health Score 6/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: DEVO's short term assets ($113.1M) exceed its short term liabilities ($32.1M).

Long Term Liabilities: DEVO's short term assets ($113.1M) exceed its long term liabilities ($1.6M).

Debt to Equity History and Analysis

Debt Level: DEVO is debt free.

Reducing Debt: DEVO had no debt 5 years ago.

Debt Coverage: DEVO has no debt, therefore it does not need to be covered by operating cash flow.

Interest Coverage: DEVO has no debt, therefore coverage of interest payments is not a concern.

Balance Sheet

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Dividend

What is Devolver Digital current dividend yield, its reliability and sustainability?

Dividend Score

0/6

Dividend Score 0/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Cash Flow Coverage

Dividend Yield vs Market

Notable Dividend: Unable to evaluate DEVO's dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.

High Dividend: Unable to evaluate DEVO's dividend yield against the top 25% of dividend payers, as the company has not reported any recent payouts.

Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if DEVO's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if DEVO's dividend payments have been increasing.

Earnings Payout to Shareholders

Earnings Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: Unable to calculate sustainability of dividends as DEVO has not reported any payouts.

Discover strong dividend paying companies

Management

How experienced are the management team and are they aligned to shareholders interests?

CEO

Devolver Digital has no CEO, or we have no data on them.

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.

Ownership Breakdown

Dilution of Shares: DEVO only recently listed within the past 12 months.

Data	Last Updated (UTC time)
Company Analysis	2022/08/15 00:00
End of Day Share Price	2022/08/15 00:00
Earnings	2021/12/31
Annual Earnings	2021/12/31