Embracer crushed our estimates during FY’Q2, the top-line came in 25% above forecast, and Operational EBIT showed a 53% beat. On a trailing-twelve-month basis, Embracer has produced almost SEK 2bn in cash flow from operations with a high cash conversion ratio. Embracer continues to invest in its pipeline, and the company now has 86 projects in development. We view the recent share price drop as unmotivated, and we reiterate our Base-case valuation. We argue that the current valuation is attractive for a company of Embracer’s high quality.