Evolution

Better Collective

Kambi Group

Gentoo Media

* Growth potential is attractive, but it will be challenging to achieve 5x growth in 10 years despite double-digit growth prospects.
* Highly fragmented online casino affiliate market, indicating intense competition and potential pressure on market share.
* Potential risk of disruption due to dependence on Google for search traffic, with some sites experiencing traffic loss.
* Significant regulatory exposure, as affiliates are both directly and indirectly impacted by online gambling regulations.
* Products do not contribute to the greater good, as online casino is purely recreational and can potentially be harmful to users.

* Strong recurring revenue model with 90% of sales from revenue-share and fixed fees, enhancing business stability and predictability.
* Asset-light business model with strong operating leverage and high ROIC, allowing for efficient scaling without costly reinvestment.
* Successful geographic expansion into new markets, including South America and North America, demonstrating adaptability and growth potential.
* Diversified revenue base across products, regions, and customers, reducing risk and enhancing operational stability.
* Strong competitive advantages in certain regions, particularly with ranking sites like AskGamblers that benefit from network effects through user-generated content.

* Lack of consistent earnings growth, with EPS growth not maintaining above 10% over the last five years and unstable growth over the past decade.
* Negative shareholder equity after split-up, but likely fixed in a few quarters given strong earnings.
* High debt-to-equity ratio exceeding 40%, potentially increasing financial risk and limiting flexibility during economic downturns.

* Strong profitability with gross profit margin over 40% and operating margin above 20%, indicating pricing power and operational efficiency.
* Consistent outperformance in Return on Equity (ROE) and Return on Assets (ROA) compared to industry averages, suggesting effective capital utilization.
* Robust financial health with current assets 1.5 times greater than current liabilities and manageable debt levels relative to cash flow.
* High-quality earnings demonstrated by strong Operating Cash Flow and Free Cash Flow conversion rates, exceeding 80% over the past five years.

* Lack of a clear dividend policy, potentially limiting immediate shareholder returns.
* Limited use of share buybacks or stock-based acquisitions, which could be valuable capital allocation tools.
* Absence of sustainability-related performance incentives in executive compensation plans.
* Limited information available on executive severance packages and certain aspects of compensation structure.
* Potential room for improvement in female representation in leadership positions.

* Strong leadership with CEO Jonas Warrer demonstrating a clear long-term vision, deep industry knowledge, and a track record of success in value creation.
* Lean organization with a well-functioning management team, consistently delivering on promises and maintaining stable profitability.
* Effective capital allocation strategy, focusing on organic growth and strategic acquisitions, resulting in strong returns on investment.
* Transparent and timely investor communication, with consistent messaging and focus on long-term business value.
* Significant insider ownership, including the CEO and board members, aligning management interests with shareholders.

Fantasma Games

Lagercrantz Group

Fortnox

Systemair

Addnode Group

PowerCell Sweden

Invisio

Enea

Hexatronic Group

* Concentrated revenue base primarily focused on live casino products, potentially limiting diversification.
* Regulatory risks in the online gambling industry could impact operations and future growth prospects.
* Potential key person risk with CEO and CPO playing crucial roles in business growth and product development.
* Ethical concerns surrounding the online casino industry may pose reputational and regulatory challenges.
* Limited evidence of proactive environmental sustainability initiatives, which may become increasingly important to stakeholders.

* Strong recurring revenue model with low capex requirements, enabling efficient scaling and expansion into new markets.
* Dominant position in the live casino market with high barriers to entry, benefiting from industry tailwinds.
* Robust competitive advantages, including brand loyalty and high switching costs for operators, suggesting long-term sustainability.
* Resilient business model with limited cyclical dependencies and strong pricing power, indicating operational stability.
* Close collaboration with customers for innovation, potentially leading to better products and stronger relationships with operators.

* Earnings (EPS) growth in the latest year did not exceed the five-year historical average, potentially indicating a slowdown in growth momentum.
* The company's Return on Assets (ROA) variance surpasses the industry average over the past five years, suggesting some earnings volatility.
* While not necessarily negative, the lack of significant CAPEX increase might indicate potential underinvestment in future growth opportunities.

* Exceptional profitability with high gross profit and operating margins, consistently outperforming industry averages in ROE and ROA over the past five years.
* Strong historical growth, with stock price compounding over 10% since IPO and revenue growth consistently above industry average for the last five years.
* Robust financial health, demonstrated by favorable current ratio, low debt levels, and strong interest coverage.
* High-quality earnings with effective accounts receivable collection, and strong operating and free cash flow conversion rates.
* Impressive dividend performance, featuring consistent growth, high yield, and excellent cash flow coverage.

* Limited female representation in leadership positions, with only one of five management team members being female.
* CEO compensation significantly higher than other executives, potentially indicating an imbalance in the leadership structure.
* Lack of explicit sustainability-related performance incentives in executive compensation plans, which may hinder long-term ESG integration.
* Absence of a controlling owner with a very long-term commitment (>20% ownership), which could impact strategic stability.
* Limited information on the company's exposure to unregulated markets, potentially raising concerns about transparency and risk management.

* Strong founder mentality with a passionate CEO who has deep industry knowledge, challenges conventional practices, and focuses on long-term value creation.
* Excellent execution capability demonstrated by a lean, decentralized organization and consistent delivery on promises, backed by a management team with long tenure.
* Effective capital allocation with a focus on innovation, attractive returns on investments, and a clear dividend policy complemented by opportunistic share buybacks.
* Transparent and consistent investor communication, focusing on long-term business value and maintaining a clear equity story over time.
* Strong ownership structure with founder involvement, significant insider ownership, and substantial management stakes, aligning interests with shareholders.

* Operates in a fragmented market with numerous competitors, potentially limiting market dominance.
* Indirect exposure to regulatory risks through customers in the gambling industry.
* Dependence on key individuals (CEO and COO) for continued success.
* Products do not significantly contribute to the greater good, primarily serving recreational purposes.
* Potential ethical concerns associated with the sports betting industry.

* Strong recurring revenue base (60%) with potential for growth, enhancing business stability and predictability.
* Successful geographic expansion from Nordics to Europe, North America and South America, demonstrating adaptability and growth potential.
* High ROIC and operating leverage, with strong margins and efficient capital allocation.
* Robust competitive advantage through strong assets and scale, likely to improve over time.
* Diversified revenue base and limited correlation with economic cycles, providing operational stability.

* Lack of consistent operating margin growth over three consecutive years, potentially indicating challenges in cost management or operational efficiency.
* Return on Equity (ROE) and Return on Assets (ROA) performance below desired thresholds, but this is partly explained by acquisitions.
* Absence of dividend payments, limiting appeal for income-focused investors. However, given M&A potential, we believe it makes sense to allocate capital to acquisitions rather than dividends.

* Strong profitability with gross profit margin exceeding 40% and operating margin above 20%, indicating pricing power and competitive advantage.
* Consistent revenue growth outperforming industry average over the last five years, signaling market share gains and competitive strength.
* Solid financial health with current assets 1.5 times greater than current liabilities, low debt levels, and strong interest coverage.
* Excellent earnings quality demonstrated by efficient inventory management, effective accounts receivable collection, and high operating and free cash flow conversion rates.

* Lack of dividend payouts, as all profits are reinvested in the business, which may not appeal to income-focused investors.
* Limited board ownership, with only three of eight board members holding sizeable personal stakes, potentially reducing alignment with shareholder interests.
* Limited female representation in leadership, with the company still working towards its target of 35% female employees (currently at 31%).

* Strong founder-led leadership with CEO Jesper Sögard demonstrating visionary thinking, industry expertise, and a commitment to long-term value creation.
* Decentralized organization with a lean structure, promoting accountability and adaptability, supported by consistent delivery on promises and strategic goals.
* Effective capital allocation, including well-timed acquisitions and share issuances, with a focus on generating attractive returns on investments.
* Transparent and timely investor communication, with management being candid about challenges and maintaining consistent long-term objectives.
* Significant insider ownership, with CEO and COO holding approximately 34% of shares, aligning management interests with shareholders.