Evolution Gaming Group AB (publ) (STO:EVO) is a stock with outstanding fundamental characteristics. When we build an investment case, we need to look at the stock with a holistic perspective. In the case of EVO, it is a financially-sound company with a strong track record and an optimistic growth outlook. In the following section, I expand a bit more on these key aspects. If you’re interested in understanding beyond my high-level commentary, take a look at the report on Evolution Gaming Group here.
Flawless balance sheet with solid track record
Investors in search of impressive top-line expansion should look no further than EVO, with its expected 52% revenue growth in the upcoming year. This is expected to flow down into an impressive return on equity of 47% over the next couple of years. Over the past few years, EVO has demonstrated a proven ability to generate robust returns of 56% Unsurprisingly, EVO surpassed the Hospitality industry return of 21%, which gives us more confidence of the company’s capacity to drive earnings going forward.
EVO’s strong financial health means that all of its upcoming liability payments are able to be met by its current cash and short-term investment holdings. This implies that EVO manages its cash and cost levels well, which is a key determinant of the company’s health. EVO’s has produced operating cash levels of 13.14x total debt over the past year, which implies that EVO’s management has put its borrowings into good use by generating enough cash to cover a sufficient portion of borrowings.
For Evolution Gaming Group, I’ve put together three fundamental factors you should further research:
- Valuation: What is EVO worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether EVO is currently mispriced by the market.
- Dividend Income vs Capital Gains: Does EVO return gains to shareholders through reinvesting in itself and growing earnings, or redistribute a decent portion of earnings as dividends? Our historical dividend yield visualization quickly tells you what your can expect from EVO as an investment.
- Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of EVO? Explore our interactive list of stocks with large potential to get an idea of what else is out there you may be missing!
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at firstname.lastname@example.org.