OM:NET B

Stock Analysis Report

Executive Summary

NetEnt AB (publ) provides digital distributed games and gaming systems to online casino operators worldwide.


Snowflake Analysis

High growth potential, good value and pays a dividend.


Similar Companies

Share Price & News

How has NetEnt's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: NET B's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

7.7%

NET B

8.2%

SE Hospitality

0.3%

SE Market


1 Year Return

-19.8%

NET B

-12.8%

SE Hospitality

-13.2%

SE Market

Return vs Industry: NET B underperformed the Swedish Hospitality industry which returned -12.8% over the past year.

Return vs Market: NET B underperformed the Swedish Market which returned -13.2% over the past year.


Shareholder returns

NET BIndustryMarket
7 Day7.7%8.2%0.3%
30 Day8.2%-22.6%-19.3%
90 Day-5.2%-24.0%-23.1%
1 Year-19.8%-19.8%-10.1%-12.8%-11.0%-13.2%
3 Year-65.3%-65.3%5.8%-1.1%-0.2%-14.7%
5 Year-47.8%-48.6%91.8%75.6%6.0%-16.1%

Price Volatility Vs. Market

How volatile is NetEnt's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is NetEnt undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: NET B (SEK24.78) is trading below our estimate of fair value (SEK91.21)

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


Price To Earnings Ratio

PE vs Industry: NET B is poor value based on its PE Ratio (13.8x) compared to the Hospitality industry average (11.3x).

PE vs Market: NET B is good value based on its PE Ratio (13.8x) compared to the Swedish market (14.4x).


Price to Earnings Growth Ratio

PEG Ratio: NET B is good value based on its PEG Ratio (0.6x)


Price to Book Ratio

PB vs Industry: NET B is overvalued based on its PB Ratio (6.2x) compared to the SE Hospitality industry average (1.6x).


Next Steps

Future Growth

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

22.0%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: NET B's forecast earnings growth (22% per year) is above the savings rate (-0.4%).

Earnings vs Market: NET B's earnings (22% per year) are forecast to grow faster than the Swedish market (8.3% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: NET B's revenue (11.8% per year) is forecast to grow faster than the Swedish market (4.1% per year).

High Growth Revenue: NET B's revenue (11.8% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: NET B's Return on Equity is forecast to be very high in 3 years time (47.9%).


Next Steps

Past Performance

How has NetEnt performed over the past 5 years?

11.0%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: NET B has high quality earnings.

Growing Profit Margin: NET B's current net profit margins (24.3%) are lower than last year (32.4%).


Past Earnings Growth Analysis

Earnings Trend: NET B's earnings have grown by 11% per year over the past 5 years.

Accelerating Growth: NET B's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: NET B had negative earnings growth (-25.7%) over the past year, making it difficult to compare to the Hospitality industry average (0.2%).


Return on Equity

High ROE: Whilst NET B's Return on Equity (44.83%) is outstanding, this metric is skewed due to their high level of debt.


Next Steps

Financial Health

How is NetEnt's financial position?


Financial Position Analysis

Short Term Liabilities: NET B's short term assets (SEK779.1M) exceed its short term liabilities (SEK654.3M).

Long Term Liabilities: NET B's short term assets (SEK779.1M) do not cover its long term liabilities (SEK2.5B).


Debt to Equity History and Analysis

Debt Level: NET B's debt to equity ratio (234%) is considered high.

Reducing Debt: Insufficient data to determine if NET B's debt to equity ratio has reduced over the past 5 years.

Debt Coverage: NET B's debt is well covered by operating cash flow (25.7%).

Interest Coverage: NET B's interest payments on its debt are well covered by EBIT (9.1x coverage).


Balance Sheet

Inventory Level: NET B has a low level of unsold assets or inventory.

Debt Coverage by Assets: NET B's debt is not covered by short term assets (assets are 0.3x debt).


Next Steps

Dividend

What is NetEnt's current dividend yield, its reliability and sustainability?

4.04%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: NET B's dividend (4.04%) is higher than the bottom 25% of dividend payers in the Swedish market (2.07%).

High Dividend: NET B's dividend (4.04%) is low compared to the top 25% of dividend payers in the Swedish market (6.37%).


Stability and Growth of Payments

Stable Dividend: NET B's dividend payments have been volatile in the past 10 years.

Growing Dividend: NET B's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (55.8%), NET B's dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: NET B's dividends in 3 years are forecast to be covered by earnings (66.1% payout ratio).


Next Steps

Management

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

1.6yrs

Average management tenure


CEO

Therese Hillman (39yo)

2.08s

Tenure

Ms. Therese Hillman has been Chief Executive Officer of NetEnt AB (publ) since May 22, 2018. Ms. Hillman has been a Director of Actic Sverige AB since 2018. She has been Director of MQ Holding AB since Jan ...


Leadership Team

NamePositionTenureCompensationOwnership
Therese Hillman
Chief Executive Officer2.08yrsno data0.0056% SEK333.6k
Lars Johansson
Chief Financial Officer1.58yrsno data0.0042% SEK247.7k
Tobias Palmborg
Acting Chief ­Technology ­Officerno datano datano data
James Elliott
General Counsel1.25yrsno datano data
Pamela Williams
Head of Compliance1.25yrsno datano data
Björn Krantz
Chief Operating Officer of Commercial Operationsno datano datano data
Christian Lindhoff
Chief Game Development Officer2.25yrsno datano data

1.6yrs

Average Tenure

46yo

Average Age

Experienced Management: NET B's management team is not considered experienced ( 1.6 years average tenure), which suggests a new team.


Board Members

NamePositionTenureCompensationOwnership
Pontus Lindwall
Independent Director9.25yrskr303.00k0.36% SEK21.1m
Christoffer Lundstrom
Director0.92yrno datano data
Fredrik Erbing
Independent Chairman of the Board2yrskr610.00k0.10% SEK5.9m
Peter Hamberg
Independent Director11yrskr303.00k5.9% SEK349.9m
Maria Redin
Independent Director8.25yrskr337.00k0.0050% SEK294.5k
Jonathan Pettemerides
Independent Director0.92yrno datano data
Lisa Gunnarsson
Independent Director0.92yrno datano data

2.0yrs

Average Tenure

46yo

Average Age

Experienced Board: NET B's board of directors are not considered experienced ( 2 years average tenure), which suggests a new board.


Ownership

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


Insider Trading Volume

Insider Buying: NET B insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

NetEnt AB (publ)'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: NetEnt AB (publ)
  • Ticker: NET B
  • Exchange: OM
  • Founded: 1996
  • Industry: Casinos and Gaming
  • Sector: Consumer Services
  • Market Cap: kr5.926b
  • Shares outstanding: 239.13m
  • Website: https://www.netent.com

Number of Employees


Location

  • NetEnt AB (publ)
  • Vasagatan 16
  • Stockholm
  • Stockholm County
  • 111 20
  • Sweden

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
0RG0LSE (London Stock Exchange)SER'B'NPV (POST SPLIT)GBGBPNo data
NET BOM (OMX Nordic Exchange Stockholm)SER'B'NPV (POST SPLIT)SESEKNo data
NET BOM (OMX Nordic Exchange Stockholm)YesSeries B StockSESEKApr 2007
0XX7LSE (London Stock Exchange)YesSeries B StockGBSEKApr 2007
KT0UDB (Deutsche Boerse AG)YesSeries B StockDEEURApr 2007
NETBSBATS-CHIXE (BATS 'Chi-X Europe')YesSeries B StockGBSEKApr 2007
NTAB.FOTCPK (Pink Sheets LLC)YesSeries B StockUSUSDApr 2007
NTNT.YOTCPK (Pink Sheets LLC)ADRUSUSDAug 2016
NET BOM (OMX Nordic Exchange Stockholm)NPV BSESEKMay 2018

Biography

NetEnt AB (publ) provides digital distributed games and gaming systems to online casino operators worldwide. The company’s gaming solutions include NetEnt Live, NetEnt Engage, Pooled Jackpots, Branded Games, and Back Office. It has approximately 200 game titles in 24 languages, which can be played on computers, tablet, and mobiles, as well as physical gaming machines. The company was formerly known as Net Entertainment NE AB (publ) and changed its name to NetEnt AB (publ) in May 2015. NetEnt AB (publ) was founded in 1996 and is based in Stockholm, Sweden. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/04/03 22:59
End of Day Share Price2020/04/03 00:00
Earnings2019/12/31
Annual Earnings2019/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.