As Evolution marks its 20th anniversary, investors remain focused on regulatory “ring-fencing” in Europe and the impacts of cybercrime in Asia. But it seems that the market has effectively priced in perpetual friction, dragging the valuation down to a level that completely ignores the underlying resilience of the business. That’s not to say that everything is fine, and as management remains “proud but not satisfied” with recent performance, the near term outcome it’s uncertain. However, the long-term potential for online casino remains as high as ever given that the majority of gaming activity globally is still land-based.
As a quick recap, Q1 2026 results looked like this: net revenues of EUR 513 million, a slight year-over-year decline of 1.5%, but on a constant currency growth of 6.8%, highlighting the impact of a weak USD. Regional performance was also mixed: while Europe declined 5.9% quarter-over-quarter due to regulatory volatility, Latin America delivered a 29.3% YoY growth and North America saw improved 10.1% YoY growth (21.4% growth in local currency). Despite these dynamics, management has maintained a solid EBITDA margin of 65.4% for the quarter (down 20 bps YoY), remaining disciplined as they prepare for a record-breaking product roadmap in the second half of the year.
Management somehow agrees that the market is wrong given the aggressive highly opportunistic share buybacks (yet we haven’t seen any insider buying). In just one week following June 22, 2026, Evolution bought back nearly 1 million shares, bringing its total repurchases since May to 4.73 million shares (representing over 2% of the company’s entire share capital).
We have updated our DCF model to account for these shifting dynamics. The math suggests that the current pessimism has created a highly attractive margin of safety for long-term investors. It is time to reassess Evolution’s intrinsic value.
Valuation
Evolution trades at SEK 678 per share, representing a market capitalization of SEK 132 billion (€12.2 billion). At this price level, the stock is valued at a trailing twelve-month (TTM) EV/EBITDA multiple of 8.5x.
Based on our updated Discounted Cash Flow model, we estimate Evolution’s fair value at SEK 778 per share. This target implies a 15% upside from current levels and translates to an expected Internal Rate of Return of 15.3% over our forecast period.