Evolution AB: 1 director

A director at Evolution AB bought 99,787 shares at 1,002.143SEK and the significance rating of the trade was 72/100. Is that information sufficient for you to make an investment decision? This report gives details of those trades and adds context and analysis to them such that you can judge whether these trading decisions are ones worth following. Included in the report is a detailed share price chart which plots discretionary trades by all the company's directors over the last two years clear...

Evolution (Buy, TP: SEK1800.00) - Strong table games in September

According to our tracker, Evolution’s daily average player count continues to show monthly improvement since early August. In September, the tracker is so far showing +8% MOM driven by double-digit growth in roulette and baccarat. Although boosted by seasonality, we consider the near-term trends a relief and coupled with strong growth in new dedicated Live tables, we see potential upside to our Q3e revenue growth QOQ.

Evolution (Buy, TP: SEK1800.00) - Late-summer player improvement

After low-season June-July, Evolution has returned to MOM growth in daily average players so far in August, according to our tracker covering the ‘scalable games’. Moreover, we assume revenue growth support in H2e from key new game releases; and continued step-up of new dedicated Live tables (blackjack; not covered by our tracker) still boosted by pent-up demand among the online operators, Evolution’s customers.

Betsson (Buy, TP: SEK110.00) - Longing for the home of the brave

After the strong Q2 report (120% organic EBIT growth YOY) and further validation of the sportsbook, we have fine-tuned our above-consensus estimates. We see a good chance that the market’s tame perception of the equity story will improve in the next 12 months relating to the US sportsbook B2B case. We reiterate our BUY and SEK110 target price.

Evolution (Buy, TP: SEK1700.00) - Returning to growth focus

We have upgraded to BUY (HOLD) on recent share price softness and likely continuing support from strong growth, while our SEK1,700 target price is intact. We forecast Q2 revenues up 94% YOY and EBITDA up 110% YOY (results due at 07:30 CET on 21 July), with the rollout of dedicated tables more than offsetting any slight negative effects from stay-at-home trend reversal.

Evolution (Hold, TP: SEK1700.00) - Signs of resilience

With three weeks left of Q2, we conclude that Evolution returned to MOM growth in daily average players in May and June-to-date, according to our tracker. While it is still early days for full re-openings in Europe, so far we have been unable to spot a reversal of the stay-at-home trend in Evolution’s player figures, which we find encouraging for the growth story ahead of the Q2 preview season.

Evolution (Hold, TP: SEK1700.00) - ‘D-Day’ for stay-at-home stocks

Our proprietary data tracker is showing a more volatile trend in the daily average number of players since mid-April. Our view is that we have highlighted the first leg of UK re-openings, and the results of our data indicate the increasing risk of how re-openings will affect Evolution’s player activity in the coming months.

Betsson (Buy, TP: SEK110.00) - Recall the B2B track-record

We have raised our target price to SEK110 (100) and reiterate our BUY. The FX headwind is challenging, but the underlying business is growing nicely. We have lifted our 2021e EPS by 5% to reflect strong efficiency and expect the upcoming B2B sportsbook case for the US market to become increasingly in focus also from a share price and valuation perspective.

Evolution (Hold, TP: SEK1700.00) - Comfort from growth acceleration

Following the striking Q1 results (EBITDA +150% YOY), we are positive on the outlook for more high-double-digit organic revenue growth and EBITDA-margin gains, reflecting the scalable business (new superior products and efficient studios, and synergies from the NetEnt and BTG acquisitions). The share-price outperformance causes us to maintain our HOLD, while our new target price of SEK1,700 (1,500) reflects our raised forecasts.

Betsson (Buy, TP: SEK100.00) - Sound plans for the Americas

We reiterate our BUY and SEK100 target price with further upside potential long-term from e.g. Betsson’s execution in US and Latam growth initiatives. We do not expect the Q1 report to trigger meaningful changes to the case and identify potential sports B2B customer signings, US market entry (H2e), strong underlying markets, and potential M&A as the key near-term catalysts.

Evolution (Buy, TP: SEK1200.00) - Sustainable growth in H1 2021

Our proprietary data tracker shows 12% QOQ growth in Q1 for Evolution in terms of daily average players and 6% month-on-month growth so far in April, in line with the past 4-month average. The data indicates that Evolution’s strong organic revenue growth momentum has continued YTD, with the potential for further healthy QOQ organic revenue growth in 2021. We see slight upside potential to our estimates and consensus of c5% group organic revenue growth QOQ in Q1.

Evolution (Buy, TP: SEK1200.00) - Strong start to 2021 confirmed

Our proprietary data tracker shows >10% QOQ growth so far in Q1 for Evolution in terms of daily average players. Although our data does not account for player or games ARPU, it could provide an indication of player volume. In our view, this player volume growth indicates slight upside risk to our estimate and consensus of c5% group organic revenue growth QOQ in Q1.

Northern Lights

Betsson (Buy, TP: SEK100.00) - Sports B2B, the place to be

While the market has overlooked the Betsson case lately, we view it as one of the most interesting in gaming right now thanks to: the growing sportsbook B2B initiative; the strong underlying revenue and earnings trend; the upcoming US launch; and a rising cash position (potential for more M&A and buybacks). 14% organic revenue growth YOY so far in Q1 was just below our estimate and we have trimmed our 2021–2022e EPS. We retain our BUY and SEK100 target price.

Northern Lights

Evolution (Buy, TP: SEK1200.00) - Showing off profitable growth

We reiterate our BUY and have lifted our target price to SEK1,200 (990) on raised estimates and our positive view on near-term growth momentum (continued organic revenue growth QOQ) and profitable long-term expansion (new scalable games, studios and markets). We find it reassuring that Evolution, despite aiming for a 2021 EBITDA margin of 65%, repeated that growth should not be sacrificed over margins.

Betsson - FX headwinds and one-offs

Western Europe continues to slide q-o-q …with negative revisions as a result We stick to HOLD, TP SEK 75 (78)

Betsson - Trading update below expectations

SEK 44m in one-off cost in losses on payment providers …with trading update below cons. expectations 2-3% negative revisions on 21 EBIT from cons.

Northern Lights

Evolution (Buy, TP: SEK990.00) - Impressive January player growth

Our proprietary data tracker shows 5% month-on-month growth in January for Evolution in terms of daily average players. After a temporary slowdown post the busy Christmas/New-year period, growth has been notably strong in the last 10 days (9% week-on-week growth). The growth in January was equally driven by the games categories and skewed to the latter half of the month. We believe this supports our street-high view of continued QOQ organic revenue growth in 2021e.