Evolution AB combines a 60%–70% live-casino moat, 66% EBITDA margins, and a EUR 2.0 billion buyback with a valuation that implies little growth.
Overview
Evolution AB is a B2B “picks-and-shovels” provider to iGaming operators, licensing proprietary live casino and RNG content rather than bearing consumer player-acquisition and promotional costs. Its commission-on-GGR model, more than 870 customers, approximately 2,000 live tables, and estimated 60%–70% global B2B live dealer share create a powerful scale and distribution moat. **The investment case rests on a temporary transition discount rather than a broken franchise:** European ring-fencing, a weak US dollar, and localized studio costs depressed Q1 2026 reported revenue 1.5% year over year to EUR 513.0 million, although constant-currency growth was 6.8%. EBITDA margin remained 65.4%, and operating cash flow was EUR 345.8 million. At USD 72.35, the shares trade at approximately 11.8x trailing P/E and 11.1x P/FCF, versus a five-year peak P/E of 42.8x. The EUR 2.0 billion buyback, new Michigan and São Paulo studios, Brazil formalization, Hasbro launches, and UKGC settlement resolution are potential catalysts. Management maintains approximately 66% 2026 EBITDA-margin guidance, while the five-year probability-weighted target is USD 194.51.