In this equity analysis report, analysts Hugo Schyberg and Anton Flygare take a closer look at Rovio Entertainment, a game development company based in Finland. Rovio is discounted by 43.5% to its peers and is trading at an all-time low EV/EBIT multiple of 8.0 despite a record high EPS. Applying an EV/EBIT multiple of 10.9x for 2023E implies an upside of 36.2%.
Investment highlights:
- Future growth undervalued by market – currently trades at 8.0x EV/EBIT for 2023E, a 43.5% discount to peers median.
- A strong cash position of EUR 90.7 mn enables future growth opportunities through acquisitions and diversification of the game portfolio.
- Disciplined user acquisition spending is estimated to steadily increase EBIT margin up to and including 2023E.
