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    Is Embracer Group (OM:EMBRAC B) A Bargain Following Its First Quarter Profit Turn?

    Simply Wall St·08/16/2026 12:22:44
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    What Embracer Group’s latest earnings mean for current and prospective shareholders

    Embracer Group (OM:EMBRAC B) has drawn fresh attention after reporting first quarter results on 13 August 2026, with higher sales and revenue and a move from a loss to a small profit.

    The company reported first quarter sales of SEK 3,943 million and revenue of SEK 4,006 million, compared with SEK 3,171 million and SEK 3,261 million a year earlier. Net income came in at SEK 39 million, compared with a net loss of SEK 411 million in the prior year period, which gives investors a new reference point for assessing the stock.

    See our latest analysis for Embracer Group.

    Following the results, Embracer Group’s share price has shown strong short term momentum, with a 1 day share price return of 5.28% and a year to date share price return of 30.53%. However, the 5 year total shareholder return of a 65.99% decline reflects a much tougher longer term journey.

    If you are comparing Embracer Group with other opportunities in the market, this can be a useful moment to broaden your view and scan 106 top founder-led companies

    The recent jump in Embracer Group after its return to profit puts you at a crossroads. Is this early momentum enough to act now, or does it make more sense to wait for a clearer valuation case?

    Most Popular Narrative: 2.2% Undervalued

    The most followed valuation narrative puts Embracer Group’s fair value at SEK 77.90, slightly above the last close at SEK 76.18, which suggests only a modest gap to that target and raises the question of how confident you are in the assumptions behind it.

    The company is reallocating capital and operational focus toward its established core IPs (e.g., Lord of the Rings, Tomb Raider), expecting to double their investment allocation into these higher-return franchises this year and significantly expand recurring revenues through sequels, DLCs, and transmedia extensions, an expected driver of improved revenue and gross margin.

    Read the complete narrative.

    The real story here is how much of Embracer Group’s future value hinges on a tighter slate of core franchises, rising recurring revenue and a profit margin reset that assumes a very different earnings profile from today. Want to see how those moving parts combine into a single SEK figure for fair value?

    Result: Fair Value of SEK 77.90 (UNDERVALUED)

    Have a read of the narrative in full and understand what's behind the forecasts.

    However, Embracer Group still faces key risks, including weaker than expected PC and console releases, and revenue swings if a narrower core IP slate underperforms.

    Find out about the key risks to this Embracer Group narrative.

    Next Steps

    With sentiment mixed around Embracer Group’s turnaround, it can help to move quickly, review the numbers yourself, and decide how much optimism you share. To see what those positive factors look like in detail, take a closer look at the 3 key rewards

    Looking for more investment ideas beyond Embracer Group?

    Do not stop with just one opportunity. Fresh ideas across different types of stocks can help you build a more balanced watchlist that suits your goals and risk comfort.

    This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.