OM:PDX

Stock Analysis Report

Paradox Interactive

Executive Summary

Paradox Interactive AB (publ) develops and publishes games and brands for PC, mobile, and console platforms primarily in the United States, the United Kingdom, China, Germany, France, Russia, and Scandinavia.

Rewards

Trading at 21.9% below its fair value

Earnings are forecast to grow 23.65% per year

Earnings have grown 23.2% per year over the past 5 years

Risk Analysis

High level of non-cash earnings

Highly volatile share price over past 3 months



Snowflake Analysis

Flawless balance sheet with high growth potential.


Similar Companies

G5 Entertainment

OM:G5EN

Share Price & News

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


Latest Share Price and Events

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


Market Performance


7 Day Return

2.8%

PDX

5.9%

SE Entertainment

1.4%

SE Market


1 Year Return

12.5%

PDX

8.6%

SE Entertainment

25.4%

SE Market

Return vs Industry: PDX exceeded the Swedish Entertainment industry which returned 0.8% over the past year.

Return vs Market: PDX underperformed the Swedish Market which returned 26.1% over the past year.


Shareholder returns

PDXIndustryMarket
7 Day2.8%5.9%1.4%
30 Day6.6%10.2%1.8%
90 Day21.3%20.4%7.7%
1 Year13.3%12.5%40.5%8.6%30.6%25.4%
3 Year198.5%190.2%128.2%44.3%38.7%17.4%
5 Yearn/a4.0%-55.2%54.6%21.3%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

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

19.0%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: PDX (SEK153.4) is trading below our estimate of fair value (SEK196.29)

Significantly Below Fair Value: PDX is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: PDX is poor value based on its PE Ratio (45.3x) compared to the Entertainment industry average (32.6x).

PE vs Market: PDX is poor value based on its PE Ratio (45.3x) compared to the Swedish market (19.4x).


Price to Earnings Growth Ratio

PEG Ratio: PDX is poor value based on its PEG Ratio (1.9x)


Price to Book Ratio

PB vs Industry: PDX is overvalued based on its PB Ratio (16.2x) compared to the SE Entertainment industry average (3.5x).


Next Steps

Future Growth

How is Paradox Interactive forecast to perform in the next 1 to 3 years based on estimates from 4 analysts?

23.6%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: PDX's forecast earnings growth (23.6% per year) is above the savings rate (-0.4%).

Earnings vs Market: PDX's earnings (23.6% per year) are forecast to grow faster than the Swedish market (9.6% per year).

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

Revenue vs Market: PDX's revenue (8.2% per year) is forecast to grow faster than the Swedish market (4.4% per year).

High Growth Revenue: PDX's revenue (8.2% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: PDX's Return on Equity is forecast to be high in 3 years time (31.4%)


Next Steps

Past Performance

How has Paradox Interactive performed over the past 5 years?

23.2%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: PDX has a high level of non-cash earnings.

Growing Profit Margin: PDX's current net profit margins (28.8%) are lower than last year (30.4%).


Past Earnings Growth Analysis

Earnings Trend: PDX's earnings have grown significantly by 23.2% per year over the past 5 years.

Accelerating Growth: PDX's earnings growth over the past year (16%) is below its 5-year average (23.2% per year).

Earnings vs Industry: PDX earnings growth over the past year (16%) underperformed the Entertainment industry 24.4%.


Return on Equity

High ROE: PDX's Return on Equity (35.8%) is considered high.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Paradox Interactive's financial position?


Financial Position Analysis

Short Term Liabilities: PDX's short term assets (SEK673.9M) exceed its short term liabilities (SEK279.3M).

Long Term Liabilities: PDX's short term assets (SEK673.9M) exceed its long term liabilities (SEK195.1M).


Debt to Equity History and Analysis

Debt Level: PDX is debt free.

Reducing Debt: PDX has not had any debt for past 5 years.

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

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


Balance Sheet

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

Debt Coverage by Assets: Insufficient data to determine if PDX's debt is covered by short term assets.


Next Steps

Dividend

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

0.63%

Current Dividend Yield


Dividend Yield vs Market

company0.6%marketbottom25%1.6%markettop25%4.5%industryaverage1.7%forecastin3Years1.0%

Current dividend yield vs market & industry

Notable Dividend: PDX's dividend (0.65%) isn’t notable compared to the bottom 25% of dividend payers in the Swedish market (1.57%).

High Dividend: PDX's dividend (0.65%) is low compared to the top 25% of dividend payers in the Swedish market (4.45%).


Stability and Growth of Payments

Stable Dividend: PDX is not paying a notable dividend for the Swedish market, therefore no need to check if payments are stable.

Growing Dividend: PDX is not paying a notable dividend for the Swedish market, therefore no need to check if payments are increasing.


Current Payout to Shareholders

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


Future Payout to Shareholders

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


Next Steps

Management

What is the CEO of Paradox Interactive's salary, the management and board of directors tenure and is there insider trading?

1.2yrs

Average management tenure


CEO

Ebba Ljungerud (47yo)

1.4yrs

Tenure

kr2,504,000

Compensation

Ms. Ebba Ljungerud is Chief Executive Officer at Paradox Interactive AB (publ) since August 2018. Ms. Ljungerud was Chief Commercial Officer of Unibet Group plc from 2016 to June 30, 2018. Ms. Ljungerud ha ...


CEO Compensation Analysis

Compensation vs Market: Ebba's total compensation ($USD264.60K) is below average for companies of similar size in the Swedish market ($USD727.33K).

Compensation vs Earnings: Ebba's compensation has increased by more than 20% in the past year.


Management Age and Tenure

1.2yrs

Average Tenure

44yo

Average Age

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


Board Age and Tenure

1.5yrs

Average Tenure

49yo

Average Age

Experienced Board: PDX's board of directors are not considered experienced ( 1.5 years average tenure), which suggests a new board.


Insider Trading

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


Recent Insider Transactions

Sellkr5,840,00028 Mar 19
Shams Jorjani
EntityIndividual
Role
Senior Key Executive
Chief Business Development Officer
Shares40,000
Max Pricekr146.00

Ownership Breakdown

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


Management Team

  • Alexander Bricca (43yo)

    Chief Financial Officer

    • Tenure: 1.8yrs
  • Fredrik Wester (45yo)

    Founder & Chairman

    • Tenure: 1.4yrs
  • Johan Andersson

    Executive Vice President of Creative Direction

    • Ebba Ljungerud (47yo)

      Chief Executive Officer

      • Tenure: 1.4yrs
      • Compensation: kr2.50m
    • Marina Hedman (43yo)

      Chief Human Resources Officer

      • Tenure: 1yrs
    • Juliette Auverny-Bennetot

      Senior Legal Counsel

      • Shams Jorjani (36yo)

        Chief Business Development Officer

        • Mattias Lilja (47yo)

          Chief Production Officer

          • Tenure: 5yrs
        • Julien Wera (34yo)

          Chief Product Officer

          • Tenure: 1yrs
        • Mina Nakicenovic (47yo)

          Chief Technology Officer

          • Tenure: 1yrs

        Board Members

        • Lars Klingstedt (65yo)

          Director

          • Tenure: 3.8yrs
          • Compensation: kr90.00k
        • Håkan Sjunnesson (63yo)

          Deputy Chairman

          • Tenure: 0.7yrs
          • Compensation: kr500.00k
        • Mathias Hermansson (47yo)

          Independent Director

          • Tenure: 0.7yrs
        • Peter Ingman (51yo)

          Independent Director

          • Tenure: 1.7yrs
          • Compensation: kr250.00k
        • Josephine Salenstedt (35yo)

          Independent Director

          • Tenure: 1.7yrs
          • Compensation: kr250.00k
        • Fredrik Wester (45yo)

          Founder & Chairman

          • Tenure: 1.4yrs

        Company Information

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


        Key Information

        • Name: Paradox Interactive AB (publ)
        • Ticker: PDX
        • Exchange: OM
        • Founded: 1998
        • Industry: Interactive Home Entertainment
        • Sector: Media
        • Market Cap: kr16.780b
        • Shares outstanding: 105.60m
        • Website: https://www.paradoxinteractive.com

        Number of Employees


        Location

        • Paradox Interactive AB (publ)
        • Västgötagatan 5, 6 vån
        • Stockholm
        • Stockholm County
        • 118 27
        • Sweden

        Listings

        TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
        PDXOM (OMX Nordic Exchange Stockholm)YesOrdinary SharesSESEKMay 2016
        ETADB (Deutsche Boerse AG)YesOrdinary SharesDEEURMay 2016
        0GDULSE (London Stock Exchange)YesOrdinary SharesGBSEKMay 2016
        PRXX.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDMay 2016

        Biography

        Paradox Interactive AB (publ) develops and publishes games and brands for PC, mobile, and console platforms primarily in the United States, the United Kingdom, China, Germany, France, Russia, and Scandinavia. The company publishes own titles and titles developed by independent studios, as well as music and books. Its game portfolio comprises approximately 100 titles and brands, including Stellaris, Europa Universalis, Hearts of Iron, Crusader Kings, Cities: Skylines, Prison Architect, Magicka, Age of Wonders, and the World of Darkness. The company was founded in 1998 and is headquartered in Stockholm, Sweden. 


        Company Analysis and Financial Data Status

        All financial data provided by Standard & Poor's Capital IQ.
        DataLast Updated (UTC time)
        Company Analysis2020/01/22 22:17
        End of Day Share Price2020/01/22 00:00
        Earnings2019/09/30
        Annual Earnings2018/12/31


        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.