OM:EMBRAC B

Stock Analysis Report

Executive Summary

Embracer Group AB (publ), together with its subsidiaries, acquires, develops, and publishes PC and console games for the gaming market in Europe, the United States, Sweden, and internationally.


Snowflake Analysis

Flawless balance sheet with reasonable growth potential.


Similar Companies

Share Price & News

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


Latest Share Price and Events

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


Market Performance


7 Day Return

13.4%

EMBRAC B

10.6%

SE Entertainment

7.4%

SE Market


1 Year Return

33.8%

EMBRAC B

22.5%

SE Entertainment

-8.2%

SE Market

Return vs Industry: EMBRAC B exceeded the Swedish Entertainment industry which returned 22.5% over the past year.

Return vs Market: EMBRAC B exceeded the Swedish Market which returned -8.2% over the past year.


Shareholder returns

EMBRAC BIndustryMarket
7 Day13.4%10.6%7.4%
30 Day4.8%4.8%-14.3%
90 Day32.5%12.8%-19.4%
1 Year33.8%33.8%22.9%22.5%-5.5%-8.2%
3 Year650.5%650.5%112.8%38.1%4.9%-10.6%
5 Yearn/a-35.8%-71.3%11.9%-11.6%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

Is Embracer Group 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: EMBRAC B (SEK98.32) is trading below our estimate of fair value (SEK330.25)

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


Price To Earnings Ratio

PE vs Industry: EMBRAC B is poor value based on its PE Ratio (114.5x) compared to the Entertainment industry average (65.6x).

PE vs Market: EMBRAC B is poor value based on its PE Ratio (114.5x) compared to the Swedish market (14.9x).


Price to Earnings Growth Ratio

PEG Ratio: EMBRAC B is poor value based on its PEG Ratio (3.5x)


Price to Book Ratio

PB vs Industry: EMBRAC B is overvalued based on its PB Ratio (5x) compared to the SE Entertainment industry average (3.2x).


Next Steps

Future Growth

How is Embracer Group forecast to perform in the next 1 to 3 years based on estimates from 6 analysts?

32.7%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: EMBRAC B's forecast earnings growth (32.7% per year) is above the savings rate (-0.4%).

Earnings vs Market: EMBRAC B's earnings (32.7% per year) are forecast to grow faster than the Swedish market (7.9% per year).

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

Revenue vs Market: EMBRAC B's revenue (10.5% per year) is forecast to grow faster than the Swedish market (4.1% per year).

High Growth Revenue: EMBRAC B's revenue (10.5% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: EMBRAC B's Return on Equity is forecast to be low in 3 years time (7.8%).


Next Steps

Past Performance

How has Embracer Group performed over the past 5 years?

39.2%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: EMBRAC B has high quality earnings.

Growing Profit Margin: EMBRAC B's current net profit margins (4.1%) are lower than last year (6.6%).


Past Earnings Growth Analysis

Earnings Trend: EMBRAC B's earnings have grown significantly by 39.2% per year over the past 5 years.

Accelerating Growth: EMBRAC 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: EMBRAC B had negative earnings growth (-13.1%) over the past year, making it difficult to compare to the Entertainment industry average (-13.1%).


Return on Equity

High ROE: EMBRAC B's Return on Equity (4.1%) is considered low.


Next Steps

Financial Health

How is Embracer Group's financial position?


Financial Position Analysis

Short Term Liabilities: EMBRAC B's short term assets (SEK4.7B) exceed its short term liabilities (SEK3.1B).

Long Term Liabilities: EMBRAC B's short term assets (SEK4.7B) exceed its long term liabilities (SEK1.5B).


Debt to Equity History and Analysis

Debt Level: EMBRAC B's debt to equity ratio (31.5%) is considered satisfactory.

Reducing Debt: EMBRAC B's debt to equity ratio has reduced from 38.5% to 31.5% over the past 5 years.

Debt Coverage: EMBRAC B's debt is well covered by operating cash flow (89.4%).

Interest Coverage: EMBRAC B's interest payments on its debt are well covered by EBIT (80x coverage).


Balance Sheet

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

Debt Coverage by Assets: EMBRAC B's debt is covered by short term assets (assets are 2.4x debt).


Next Steps

Dividend

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


Dividend Yield vs Market

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

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


Stability and Growth of Payments

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

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


Current Payout to Shareholders

Dividend Coverage: EMBRAC B is not paying a notable dividend for the Swedish market.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of EMBRAC B's dividend in 3 years as they are not forecast to pay a notable one for the Swedish market.


Next Steps

Management

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

1.2yrs

Average management tenure


CEO

Lars Wingefors (42yo)

no data

Tenure

kr1,180,000

Compensation

Mr. Lars Wingefors is founder of Lars Wingefors AB. Mr. Wingefors is also the Founder of Embracer Group AB (publ) (formerly, Nordic Games Holding AB) and serves as its Chief Executive Officer. He is a Foun ...


CEO Compensation Analysis

Compensation vs Market: Lars's total compensation ($USD1.41M) is about average for companies of similar size in the Swedish market ($USD1.36M).

Compensation vs Earnings: Lars's compensation has increased by more than 20% whilst company earnings have fallen more than 20% in the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Lars Wingefors
Founderno datakr1.18mno data
Erik Stenberg
Co-Founder18.17yrskr920.00kno data
Johan Ekström
Chief Financial Officer0.58yrno data0.0015% SEK456.6k
Klemens Kreuzer
Chief Executive Officer of THQ Nordic GmbH1.17yrsno datano data
Klemens Kundratitz
Co-Founder & CEO of Koch Media1.17yrsno datano data
Anton Westbergh
Chief Executive Officer of Coffee Stain1.17yrsno datano data
Per-Arne Lundberg
Chief Executive Officer of Amplifier Game Invest AB0.17yrno datano data

1.2yrs

Average Tenure

43yo

Average Age

Experienced Management: EMBRAC B's management team is not considered experienced ( 1.2 years average tenure), which suggests a new team.


Board Members

NamePositionTenureCompensationOwnership
Lars Wingefors
Founderno datakr1.18mno data
Erik Stenberg
Co-Founder18.17yrskr920.00kno data
Kicki Wallje-Lund
Independent Chairman of the Board4.17yrskr1.20m0.015% SEK4.5m
Jacob Jonmyren
Independent Director1.83yrskr400.00k0.0034% SEK1.0m
Ulf Hjalmarsson
Independent Director1.83yrskr200.00kno data

4.2yrs

Average Tenure

56yo

Average Age

Experienced Board: EMBRAC B's board of directors are considered experienced (4.2 years average tenure).


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.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 18%.


Top Shareholders

Company Information

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


Key Information

  • Name: Embracer Group AB (publ)
  • Ticker: EMBRAC B
  • Exchange: OM
  • Founded: 1999
  • Industry: Interactive Home Entertainment
  • Sector: Media
  • Market Cap: kr30.643b
  • Shares outstanding: 311.67m
  • Website: https://www.embracer.com

Number of Employees


Location

  • Embracer Group AB (publ)
  • Aelvgatan 1
  • Karlstad
  • Värmland County
  • 652 25
  • Sweden

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
TH9ADB (Deutsche Boerse AG)YesClass B SharesDEEURNov 2016
EMBRAC BOM (OMX Nordic Exchange Stockholm)YesClass B SharesSESEKNov 2016
0GFELSE (London Stock Exchange)YesClass B SharesGBSEKNov 2016
THQQ.FOTCPK (Pink Sheets LLC)YesClass B SharesUSUSDNov 2016

Biography

Embracer Group AB (publ), together with its subsidiaries, acquires, develops, and publishes PC and console games for the gaming market in Europe, the United States, Sweden, and internationally. The company’s game catalogue consists of 150 owned franchises, such as Saints Row, Goat Simulator, Dead Island, Darksiders, Metro, MX vs ATV, Kingdoms of Amalur, TimeSplitters, Satisfactory, Wreckfest, and others. It also publishes games for various partners. In addition, the company publishes and distributes films. It distributes games through retailers and digital distributors. The company was formerly known as THQ Nordic AB (publ) and changed its name to Embracer Group AB (publ) in October 2019. Embracer Group AB (publ) was incorporated in 1999 and is headquartered in Karlstad, Sweden. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/04/01 00:00
End of Day Share Price2020/03/31 00:00
Earnings2019/12/31
Annual Earnings2019/03/31


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.