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Remedy: We keep our eye on the long game
By Atte Riikola
We reiterate our Accumulate recommendation for Remedy and raise our target price to EUR 50.0 (previously EUR 38.0) after the H2 report again strengthened our confidence in the company's long-term value creation potential. Thanks to a multi-project model that has been built with controlled risks and is well-managed, Remedy’s preconditions for developing successful games are good. In addition, favorable market trends help the company grow into a clearly larger game house than currently over this decade. Due to a growth story that progresses strongly we still play the long game with the share, even though the valuation looks tight in the short term.
Remedy Entertainment is a game developer. Its operations are primarily focused on the development of action games, with a particular focus on 3D technology. Examples of games that the company has developed include several different versions of Alan Wake, Max Payne, and Control. Remedy also develops its own game engine and tooling technology that powers many of its games. The company was founded in 1995 and is headquartered in Espoo, Finland.
Read more on company pageKey Estimate Figures14.02.2021
| 2020 | 21e | 22e | |
|---|---|---|---|
| Revenue | 41.1 | 45.9 | 48.8 |
| growth-% | 29.8 % | 11.7 % | 6.3 % |
| EBIT (adj.) | 13.2 | 15.5 | 14.8 |
| EBIT-% (adj.) | 32.2 % | 33.8 % | 30.3 % |
| EPS (adj.) | 0.86 | 1.02 | 0.97 |
| Dividend | 0.15 | 0.20 | 0.25 |
| Dividend % | 0.4 % | 1.3 % | 1.7 % |
| P/E (adj.) | 45.5 | 14.8 | 15.5 |
| EV/EBITDA | 31.5 | 9.3 | 8.8 |
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