Evolution AB Experiences CEO's Strategic Move & Strong Institutional Backing

Evolution AB (EVO:SE), previously known as Evolution Gaming Group AB, is a company headquartered in Sweden and operates in the Internet services sector. The company is involved in the development, production, marketing, and licensing of fully integrated business-to-business live casino solutions for gaming operators. Its services are offered through live casino studios located in Europe, Canada, and the USA. Evolution AB is listed on the Stockholm Stock Exchange with a market capitalization of SEK 234.793 billion.

Prominent Insider Investment

On November 10, CEO Martin Carlesund increased his ownership in the company by acquiring an additional 99,787 shares at a per-share value of SEK 1002.14. This transaction amounted to a substantial SEK 100 million or approximately $9.16 million.

Having been part of the group since 2015, Martin has held the position of CEO at Highlight Media Group, Eniro Sverige, Eniro Finland, and 3L System AB. He possesses an M.Sc in finance and has completed courses in computer science, law, and mathematics at the University of Borås, Gothenburg School of Economics, and Linköping University.

As of now, the insider's total holdings in the company amount to 684,710 shares.

Sturdy Institutional Backing

This year, the company received significant support from various institutions. Capital International Ltd. expanded its position by over 2.3 million shares, while Capital Research and Management Co. acquired more than 1.3 million shares. Geode Capital Management LLC also increased its holdings in the firm by nearly 1.1 million shares, whereas Baillie Gifford & Co. and Fidelity Management & Research Co. LLC purchased 607,519 and 355,714 shares, respectively.

Simultaneously, several mutual funds demonstrated confidence in the company too. The Nordea Nordic Fund acquired 497,311 shares, and Xtrackers SICAV - MSCI World Swap UCITS ETF bought 525,586 shares. St. James's Place Unit Trust - Global Growth and Xtrackers SICAV - S&P 500 Swap UCITS ETF increased their holdings by 411,394 and 857,394 shares, respectively.

Positive Analysts’ Ratings

In addition to significant investment activity by institutions and mutual funds, analysts at various investment firms have shown confidence in the stock. Since October 2023, analysts at ABG Sundal Collier, Jefferies, Pareto Securities, Goldman Sachs, Nordea Bank, and Carnegie Group have all issued 'Buy' recommendations for the stock. Meanwhile, analysts at Barclays assigned an 'Overweight' rating, and analysts at Morgan Stanley recommended an 'In-Line' rating.

Economic results

In addition to receiving investment support, the company disclosed robust results for Q3 2023.

Operating revenues saw a 19.6% increase to EUR 452.6 million, and EBITDA rose by 22.1% to EUR 318.6 million. The company reported a Profit for the period of EUR 272.8 million, with Earnings per share amounting to EUR 1.28.

By taking into account the performance of the company since the beginning of 2023, the company reported that Operating revenues have increased by 26.1% to EUR 1,323.3 million and EBITDA increased by 27.6% to EUR 930.5 million. Furthermore, profit for the period amounted to EUR 788.0 million. 

Besides the financial aspects, the company highlighted notable events from the third quarter, including a strong EBITDA margin of 70.4% due to high demand and cost efficiency. The launch of a second studio in LatAm was also mentioned.

Furthermore, the company reported being on track to surpass its plan of releasing more than 100 games in 2023.

By taking into consideration all these developments, the insider investment can be viewed as a bullish bet for the company’s future.