A Look at Embracer Group (OM:EMBRAC B) Valuation Following Shareholder Structure Changes

Embracer Group (OM:EMBRAC B) has changed its shareholder structure after issuing new shares to cover earn-out obligations, bringing the share count to 228,777,965. This move can shift perceptions of equity value among investors.

See our latest analysis for Embracer Group.

While the new share issuance has shifted Embracer Group’s shareholder makeup, its share price return tells a tougher story, sliding 50.45% year-to-date. Despite a modest -2.02% total shareholder return over the past year, momentum has clearly faded as markets adjust to recent financial moves and ongoing restructuring efforts.

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This turbulence raises a crucial question for investors: Is Embracer Group now undervalued in the wake of its recent changes, or is the market already factoring in the company’s future prospects and growth potential?

Most Popular Narrative: 15.9% Undervalued

Embracer Group’s most widely followed narrative places fair value at SEK 118, notably above the last close of SEK 99.2. The gap between market price and this valuation highlights renewed debate over the company’s direction and recent strategic overhaul.

The company is reallocating capital and operational focus toward its established core IPs (e.g., Lord of the Rings, Tomb Raider). It expects to double its investment allocation into these higher-return franchises this year and significantly expand recurring revenues through sequels, DLCs, and transmedia extensions, which are expected to be drivers of improved revenue and gross margin.

Read the complete narrative.

Curious which bold assumptions fuel this valuation? The forecast hinges on profit multiples and future growth targets that would surprise most observers. Discover what is driving these projections and the narrative behind Embracer’s fair value in the next section.

Result: Fair Value of SEK 118 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, weak new release performance and margin pressure from a shifting business mix could undermine expectations and challenge the current undervalued view.

Find out about the key risks to this Embracer Group narrative.

Build Your Own Embracer Group Narrative

If this outlook doesn’t match your own research or you want to dig deeper, you can easily build your perspective on Embracer Group in just a few minutes. Do it your way

A great starting point for your Embracer Group research is our analysis highlighting 3 key rewards and 3 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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