Modern Times Group MTG (OM:MTG B) Could Be 19% Below Fair Value Following Playamp Launch
Modern Times Group MTG (OM:MTG B) has reorganised its core gaming operations under the new Playamp brand after consolidating studios such as Plarium, InnoGames and Ninja Kiwi, and has set up shared services in marketing, monetisation, AI and data.
See our latest analysis for Modern Times Group MTG.
The Playamp announcement comes after a period where Modern Times Group MTG’s share price has gathered momentum, with a 1-month share price return of 13.55% and a year-to-date share price return of 21.36%, alongside a 1-year total shareholder return of 35.94% that points to strong longer term gains.
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For Modern Times Group MTG, the Playamp launch and recent share price gains could signal either a business that is now better reflected in the market or sentiment pulling ahead of fundamentals. The next step is to see what the current valuation suggests.
Most Popular Narrative: 19.3% Undervalued
Modern Times Group MTG's most followed narrative points to a fair value of SEK166.25 per share compared with a last close at SEK134.10, which frames Playamp against a valuation story built on future earnings power rather than just recent share price momentum.
The increased global uptake of mobile devices is fueling strong momentum in MTG's mobile gaming portfolio, with geographic expansion of Word Games and scaling of new titles like Tile Match and Jigsaw supporting rising daily active users (DAU) and consistent organic revenue growth.
Mainstreaming of e-sports and competitive gaming, along with the rising popularity of live streaming and interactive content, is expanding MTG's addressable audience and opens up new monetization streams in sponsorship and advertising, supporting long-term revenue and earnings growth.
Want to see what sits behind that growth story for Modern Times Group MTG? The narrative leans heavily on compounding earnings, rising margins and a future profit multiple that assumes the Playamp platform really scales. The key is how those moving parts are modelled over time.
Result: Fair Value of SEK166.25 (UNDERVALUED)
Have a read of the narrative in full and understand what's behind the forecasts.
However, Modern Times Group MTG still faces concentration risk around a few key titles and higher debt from past acquisitions that could challenge the current narrative.
Find out about the key risks to this Modern Times Group MTG narrative.
Another View on Modern Times Group MTG’s Valuation
The DCF work suggests Modern Times Group MTG is trading well below an estimated future cash flow value of SEK304.77 per share, which points to a very different level of upside than the 19.3% undervaluation implied by the narrative fair value. Which set of assumptions feels more realistic to you?
Look into how the SWS DCF model arrives at its fair value.
Next Steps
All of this leaves a mixed but interesting picture for Modern Times Group MTG, with clear reasons for optimism and some areas of concern. Act quickly, review the underlying data for yourself, and weigh both sides by checking the 4 key rewards and 1 important warning sign
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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.
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