Negative growth trend to continue in '25e

Stillfront Group (Buy, TP: SEK14.00) - Optimisation; what about growth...

We reiterate our BUY and SEK14 target price, having only fine-tuned our 2025e adj. EBIT forecast (-3%). We like the efficiency and cash flow focus, enabling healthy de-leveraging (2x net debt/EBITDA, including NTM earnouts). The company is set to host a CMD on 6 February, and we hope to get more clarity on the top-line growth outlook for 2025–2026, in addition to the recently announced optimisation activities.

Paying more to generate less

PW for Q3, weaker margins and growth

Stillfront Group (Buy, TP: SEK14.00) - Announced actions to improve

We keep our BUY but have cut our target price to SEK14 (16) ahead of Stillfront’s Q3 report, reflecting a c10% cut to our 2025e adj. EPS. The focus on efficiency should enable solid investments in user acquisition costs, with the ambition of returning to top-line growth, potentially also supported by a healthier market in the coming years. We estimate annual FCF of cSEK1bn for 2024–2025e. The results are due at 07:00 CET on 23 October.

Stillfront Group (Buy, TP: SEK16.00) - Still not realising its potenti...

We have cut our 2024–2025e EPS by 15–5% after the mixed Q2 (soft revenue balanced by a healthy adj. EBITDAC margin) and uncertain growth outlook. However, we see potential for a re-rating if Stillfront meets our H2 organic growth forecast (2% YOY) while maintaining focus on margins and cash flow, given the current depressed share price (2025e EV/EBIT adj. of 4x). We have cut our target price to SEK16 (20) but reiterate our BUY.

Negative growth trend persists

Lower organic growth despite aggressive spending recent quarters. We cut sales by 2% and adj. EBIT by 3-2% on '24e-'26e. HOLD, TP of SEK 10.5 (11.0); in line with peers at 6-5x EBIT adj.

Disappointing growth and soft outlook

The power of M&A compounding

We maintain a cautious view on growth

Q2e: -1% organic growth, SEK 441m adj. EBIT (-13% y-o-y). Growth outlook remains uncertain; estimates rel. unchanged. Reiterate HOLD, trading at 7x adj. EBIT and 7% FCFy '24e

Stillfront Group (Buy, TP: SEK20.00) - Increasingly an H2e story

We reiterate our BUY but have lowered our target price to SEK20 (21) ahead of Stillfront’s Q2 results. We expect continued flattish revenue growth YOY, but with a sharp drop in user acquisition spending QOQ to drive solid margins. We have edged down our 2024–2025e revenues by c1%, and our adj. EBITDAC by 1–2%. The results are due at 07:00 CET on 22 July.

Is the sun setting on Sunshine Island?

Sunshine Island sales may have peaked in April. Albion Online Europe server launch appears in line with expectations. Expect consensus to cut Q2 org. growth forecast by 1-2%.

Stillfront Group (Buy, TP: SEK21.00) - Most negatives priced in

Flat organic growth YOY in Q1 did not live up to the market’s expectations (we forecast +2%), and higher-than-expected UAC led to a ~15% miss on adj. EBIT. However, we believe Stillfront has laid the basis for solid earnings growth in Q2–Q3e, when it is set to lower UAC in a recovering mobile gaming market. We reiterate our BUY, but have reduced our target price to SEK21 (23), and see most of the negatives reflected at these levels.

Albion Online Europe launch data

Record investments: desperate or brilliant?

Large investments drove a surprisingly weak margin in Q1, but unclear if they will translate into sustainably higher growth. Reiterate HOLD, TP SEK 11; 7-5x EV/adj. EBIT '24e-'26e.

EBIT down by a third, growth to decelerate

Stillfront Group (Buy, TP: SEK23.00) - In search of organic growth

We expect slight positive organic sales growth (2–3% YOY in Q1–Q2e) to be enough to trigger a share price recovery from today’s depressed levels. Our 2024–2026 forecasts contain sales growth, high margins and solid cash flows, and consequently, we find the markets’ negative view to be excessive. We have left our estimates fairly intact and reiterate our BUY and SEK23 target price ahead of the Q1 report (due at 07:00 CET on 25 April).

Stillfront Group (Buy, TP: SEK23.00) - Edging closer to growth

We believe the miss on Q4 earnings was more than offset by a return to organic growth YOY in November and December. Our 2024e sales and EBIT are mostly unchanged, and we are encouraged by Stillfront’s and peers’ comments on the improving mobile gaming market. We reiterate our BUY and SEK23 target price ahead of a 2024e with a return to organic growth and FCF alleviating balance sheet concerns.

Stillfront Group (Buy, TP: SEK23.00) - Reassurance in cash flow

We reiterate our BUY but have cut our target price to SEK23 (25) ahead of the Q4 results (due at 07:00 CET on 7 February). We have reduced our 2024e adj. EBIT by 10%, mainly to reflect recent FX movements and marginally higher cost assumptions. That said, we view concerns about Stillfront’s balance sheet as exaggerated and find reassurance from the FCF stream.

Stillfront Group (Buy, TP: SEK25.00) - 2023 looks like a lost year

We reiterate our BUY but have lowered our target price to SEK25 (30), having reduced our 2023–2024e adj. EBITDA by c7%, following the disappointing Q3 results. The projected return to organic growth was once again postponed and is set for 2024. We believe market expectations are at an all-time low, while Stillfront shows signs of underlying cost improvements, somewhat offsetting balance-sheet risks, in our view.