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1. Company Snapshot

1.a. Company Description

Team17 Group plc, together with its subsidiaries, develops video games for independent developers worldwide.The company develops and publishes owned and third-party IP video games for the digital and physical market.Its games portfolio comprises approximately 100 games, including the Worms franchise, Overcooked!, and The Escapists.


Team17 Group plc was founded in 1990 and is based in Wakefield, the United Kingdom.

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1.b. Last Insights on TM17

Team17 Group's recent performance was hindered by the UK's economic downturn, as the FTSE 100 index declined due to weak trade data from China. This global economic shift impacted companies with international ties, including Team17. Furthermore, the company's reliance on the gaming industry, which is susceptible to market fluctuations, may have contributed to its recent struggles. Additionally, the absence of any notable acquisitions or new product releases in the past quarter may have limited the company's growth prospects.

1.c. Company Highlights

2. Everplay Group's H1 2025 Financial Highlights

Everplay Group reported revenue of £72.4 million for H1 2025, a 10% decline from £80.6 million in H1 2024, primarily due to the timing of licensing revenue and reduced physical sales at astragon. However, adjusted EBITDA rose to £19.2 million, with margins improving to 26.5% from 24.1%, driven by a stronger product mix and the absence of title impairments. The company declared a 1p per share interim dividend. Earnings per share (EPS) came in at -0.06462, below estimates of 0.058. The company's cash reserves stood at £59.4 million.

Publication Date: Sep -15

📋 Highlights
  • Revenue Decline but EBITDA Growth:: H1 2025 revenue fell 10% to GBP 72.4M, yet adjusted EBITDA rose to GBP 19.2M (26.5% margin) due to improved product mix and no title impairments.
  • New Releases Drive Performance:: *Date Everything!* sold 500,000 units, while *Hell Let Loose Vietnam* achieved 130,000 wishlists in 10 days, supported by 28% higher concurrent users in the back catalog.
  • Strategic M&A Activity:: Acquired 3 IP/back catalog titles (e.g., *Hammerwatch*) and 5 additional IPs, aiming to bolster long-term revenue stability and expand first-party IP portfolio (10 titles in development).
  • Divisional Performance:: StoryToys grew revenue by 2% with 330,000 subscribers, while astragon’s H1 revenue dipped 35% but is set for H2 recovery with new titles like *Seafarer: The Ship Sim*.
  • Strong Cash Position & Outlook:: GBP 59.4M cash reserves and GBP 30M in planned H2 2024/FY 2026 CapEx for M&A and console ports, with H2 2025 guided for robust growth from new releases and licensing deals.

Financial Performance and Valuation

The company's financial performance is reflected in its valuation metrics. The stock trades at a P/E Ratio of -101.38, P/B Ratio of 1.54, and P/S Ratio of 2.39. The EV/EBITDA ratio stands at 12.3, indicating the market's expectations for future growth. The Dividend Yield is 0.0%, and the Free Cash Flow Yield is 0.14%. Return on Invested Capital (ROIC) is 9.7%, while Return on Equity (ROE) is -1.5%. The Net Debt / EBITDA ratio is -1.3, highlighting the company's net cash position.

Operational Highlights and Outlook

New releases, including *Date Everything!* and *Hell Let Loose Vietnam*, drove H1 performance, while back catalog titles saw a 28% increase in concurrent users. The company remains focused on first-party IP, with 10 titles in development. M&A activity included three IP and back catalog acquisitions, including *Hammerwatch*. Everplay expects strong H2 2025 performance, driven by new releases and licensing deals, positioning the company for full-year revenue growth.

Strategic Focus and Growth Initiatives

Everplay's strategic focus remains on first-party IP, M&A, and back catalog publishing. The company is confident in delivering strong performance in H2, driven by new releases, licenses, and acquisitions. The long-term goal is to achieve £100 million in adjusted EBITDA through organic growth and strategic M&A. Team17's pipeline balances premium titles and live service franchises, leveraging long-tail value from older games.

3. NewsRoom

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Team17 Group And 2 Other UK Penny Stocks To Watch

Feb -03

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3 Promising UK Penny Stocks With Market Caps Under £800M

Jan -03

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3 UK Penny Stocks With Market Caps Under £300M To Watch

Dec -02

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3 UK Penny Stocks With Market Caps Under £400M

Oct -31

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Team17 Group First Half 2024 Earnings: EPS: UK£0.063 (vs UK£0.039 in 1H 2023)

Sep -21

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Are Investors Undervaluing Team17 Group plc (LON:TM17) By 46%?

Jul -12

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Questor: We’ve lost money on this video game stock – but this is no time to sell

May -02

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Investors in Team17 Group (LON:TM17) have unfortunately lost 70% over the last three years

Mar -18

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (3.00%)

6. Segments

Computer Games

Expected Growth: 3.0%

Strong demand for Team17's diversified portfolio of games, including Worms and Overcooked, drives 3.0% growth. Expanding online gaming market, increasing adoption of digital distribution platforms, and growing esports industry also contribute to growth. Additionally, the company's strategic partnerships and investments in emerging technologies, such as cloud gaming and virtual reality, position it for future success.

7. Detailed Products

Worms Franchise

A popular turn-based strategy game series featuring cartoon-style worms engaging in combat.

Overcooked Franchise

A cooking simulation game that challenges players to work together to prepare and serve meals in a chaotic kitchen environment.

Escapists Franchise

A sandbox game where players plan and execute a prison break, using strategy and stealth to escape.

Mugsters

A physics-based puzzle game where players use a variety of vehicles and gadgets to rescue survivors from an alien invasion.

Yoku's Island Express

A pinball-inspired open-world game where players explore a tropical island, helping the inhabitants and uncovering secrets.

My Time at Portia

A life simulation game where players inherit a neglected workshop and must rebuild it, completing commissions and helping the town's inhabitants.

Neon Abyss

A roguelike action-platformer where players control a member of a group of characters, fighting to take down a powerful corporation.

8. Team17 Group plc's Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Team17 Group plc is medium due to the availability of alternative gaming platforms and the ease of switching costs for gamers.

Bargaining Power Of Customers

The bargaining power of customers for Team17 Group plc is low due to the fragmented nature of the gaming market and the lack of concentration among buyers.

Bargaining Power Of Suppliers

The bargaining power of suppliers for Team17 Group plc is medium due to the presence of a few large game developers and publishers, but the company's diversified supplier base mitigates this risk.

Threat Of New Entrants

The threat of new entrants for Team17 Group plc is high due to the low barriers to entry in the gaming industry and the ease of developing and publishing games digitally.

Intensity Of Rivalry

The intensity of rivalry for Team17 Group plc is high due to the highly competitive nature of the gaming industry, with many established players and new entrants vying for market share.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 1.43%
Debt Cost 5.74%
Equity Weight 98.57%
Equity Cost 5.74%
WACC 5.74%
Leverage 1.45%

11. Quality Control: Team17 Group plc passed 6 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
GDEV

A-Score: 5.6/10

Value: 6.8

Growth: 6.4

Quality: 7.4

Yield: 8.8

Momentum: 4.0

Volatility: 0.0

1-Year Total Return ->

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Stock-Card
Paradox Interactive

A-Score: 4.6/10

Value: 1.9

Growth: 8.2

Quality: 8.4

Yield: 3.1

Momentum: 1.5

Volatility: 4.7

1-Year Total Return ->

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Stock-Card
11 bit studios

A-Score: 4.1/10

Value: 5.4

Growth: 4.4

Quality: 6.9

Yield: 0.0

Momentum: 5.5

Volatility: 2.3

1-Year Total Return ->

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Stock-Card
Team17

A-Score: 3.9/10

Value: 4.9

Growth: 6.1

Quality: 3.4

Yield: 0.0

Momentum: 6.5

Volatility: 2.3

1-Year Total Return ->

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Stock-Card
Stillfront

A-Score: 3.6/10

Value: 9.8

Growth: 4.4

Quality: 3.1

Yield: 0.0

Momentum: 3.5

Volatility: 1.0

1-Year Total Return ->

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Stock-Card
Remedy Entertainment

A-Score: 3.5/10

Value: 5.4

Growth: 5.1

Quality: 4.9

Yield: 0.0

Momentum: 3.0

Volatility: 2.7

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

2.64$

Current Price

2.64$

Potential

-0.00%

Expected Cash-Flows