EVGGF - Evolution AB: Big Buybacks Are A Game Changer
2025-06-02 17:02:17 ET
Summary
- Evolution AB's share price has dropped 65% since 2021, but its strong free cash flow and high business quality make it attractive now.
- The company boasts exceptional margins and a dominant position in online gaming infrastructure, though growth has slowed due to market saturation.
- Management's shift towards buybacks, alongside stable dividends, should drive EPS growth and potentially re-rate the stock higher over time.
- Despite regulatory and operational risks, I see Evolution as a solid buy at current valuations, especially if buybacks continue consistently.
Evolution AB (EVVTY) (EVGGF) has not been treated well by the markets since mid-2021, falling from $200 a share to the current high $60s. This impressive 65% fall in price might begin to be over in my view as the company's P/FCF ratio gets close to 12. While it is true that the company stopped growing nicely from above 30% to reach the current 4-6% plateau, I think that the new stability in shareholder returns and the extremely high business quality bring an attractive opportunity to buy the shares at these prices. ...
Evolution AB: Big Buybacks Are A Game Changer