MAG Interactive AB (publ) (MAGI.ST) fair value

ACCE thesis

MAG Interactive publishes mobile games in Sweden, with its Sthlm-based studio behind titles distributed through the App Store and Google Play, and it earns revenue largely from in-app purchases and advertising. The gross margin of 56.3% is respectable for a small game publisher, but the operating margin of -2.3% and ROE of -3.3% show the business is not yet covering its cost base, so the case rests on operating leverage rather than current profitability. Revenue growth of 7.9% is positive but modest, and the trailing P/E of 237.5 is distorted by depressed earnings while the forward P/E of 12.8 implies the market expects a swing back to profit. That gap between trailing and forward earnings is the first thing to verify: if management's cost actions and title launches deliver the earnings the forward multiple assumes, the stock looks cheap on paid-for earnings, and if they don't, the forward number is a hope rather than an estimate. At a 252M SEK market cap in a thinly covered small cap, this merits a deeper look at the title pipeline, retention on existing hits, and the cost base, but the thesis depends on margin recovery that the current numbers do not yet show.