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. ...

Read the full article on Seeking Alpha

For further details see: