EVGGF - Evolution AB: This Stock Won't Stay Cheap Forever

2025-02-26 03:28:20 ET

Summary

• Evolution AB's stock keeps falling, but the business keeps growing and is expected to grow further.
• My reverse DCF valuation suggests that the market is pricing in low-single-digit FCF/share growth in perpetuity, which seems very pessimistic for a growth stock.
• Evolution AB has an impressive 8%+ free cash flow yield and is buying back shares.
• Risks (such as regulatory risks and cyberattacks) are worth noting, but Evolution is no stranger to risks, and the valuation seems to price them in.

Evolution AB ( OTCPK:EVVTY ) ( OTCPK:EVGGF ), a company that offers live casino games, has been one of those frustrating stocks where the company has been growing, but the stock price has only gone down for the past few years. I've covered the stock twice, once in September 2024 and then in November . For more info about the business itself (which is highly profitable), I suggest reading those articles, as I don't want to repeat myself too much....

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