Coffee Stain runs 12 decentralized studios under a capital-light, founder-led model, and its differentiator is genuine back-catalog durability: the six core titles drive 90% of sales and average ~8 years since release, with Satisfactory posting its strongest year seven years after early access. For a hit-driven industry, that longevity — engaged communities, continuous updates, early-access craft — is the real economic asset.
But the reported FY2025/26 numbers are noisy: EBIT collapsed to SEK 55m (from 322m) on a deliberately lower development-capitalization rate, SEK 75m of items affecting comparability (listing costs, mobile-studio closure, R&D impairment) and a -12% net-sales decline. On mttssn methodology — which refuses the SEK 156m PPA add-back the company reports — adjusted ROIC is only 5.7% and economic profit is -SEK 57m at an 8% charge.
The balance sheet is a genuine strength: post-listing the SEK 2.1bn owner loans were fully repaid, leaving net cash of ~SEK 0.6bn, and ~42% cash-EBIT margins convert to FCF of SEK 301m. Management plans a ~SEK 300m capital return. The pipeline (Valheim 1.0, PS5/Switch 2 launches) is the swing factor — but the model remains launch-timing dependent.
On EV SEK 3.26bn (net cash 0.6bn), Coffee Stain trades at ~11x FCF and ~9% FCF yield — reasonable but not cheap for a hit-driven publisher with declining revenue and murky, R&D-capitalization-sensitive earnings. On the mttssn frame economic profit is negative, so there is no clear margin of safety.
Base SEK 18 (~flat): the back-catalog holds, capital returns support, no new mega-hit. Bull SEK 25: Valheim 1.0 and the console/Switch 2 pipeline deliver and the back-catalog re-rates on buybacks. Bear SEK 11: new launches disappoint, the back-catalog decays and revenue keeps sliding.
At today’s enterprise value the constant-ROIC reverse-DCF maxes out: even at its sustainable-growth ceiling (~5.4%, limited by ROIC 6% ≈ WACC 8%) it cannot reach the current EV. No-growth value is SEK 10/share (57% of price); the market prices in growth and/or a higher ROIC than booked — richly valued on this lens. Read the sensitivity grid.
| Scenario | 24m target | Impl. g | Upside | Prob. | Driver |
|---|---|---|---|---|---|
| Bull | SEK 25 | ≥5% | +45% | 25% | Valheim 1.0 + console/Switch 2 pipeline hits; back-catalog re-rates + buybacks |
| Base | SEK 18 | ≥5% | +4% | 50% | Back-catalog holds, capital returns, no new mega-hit — fair value |
| Bear | SEK 11 | ≥5% | -36% | 25% | New launches flop, back-catalog decays, revenue keeps sliding |
| Prob-weighted | SEK 18 | — | +4% | 100% | Scenario-weighted expected value |
| WACC \ g | 0% | 3% | 5% | 8% | 10% | 15% |
|---|---|---|---|---|---|---|
| 6.50% | 12 | 12 | 12 | 11 | 11 | 10 |
| 7.25% | 11 | 11 | 10 | 10 | 9 | 7 |
| 8.00% (base) | 10 | 9 | 9 | 8 | 8 | 6 |
| 8.75% | 9 | 9 | 8 | 7 | 7 | 4 |
| 9.50% | 9 | 8 | 7 | 6 | 6 | 3 |
Green = fair value above the current price of SEK 17.30. The reverse-DCF conclusion is dominated by WACC and growth — see the whole surface, not a single fair value.
⤓ Download the full model (.xlsx) — formula-driven sheets; flex the blue input cells and the model cascades in Excel.
6 core titles = 90% of sales, avg ~8 yrs since release — rare longevity for games IP.
Valheim 1.0, PS5 and Switch 2 releases are the upside optionality.
~42% cash-EBIT margin, FCF 301m (~9% of EV) — strong conversion.
SEK 0.6bn net cash post-listing plus a ~SEK 300m capital-return plan.
Co-founder CEO, decentralized capital-efficient studios.
A founder-led games group with an unusually durable back-catalog, a net-cash balance sheet and strong cash conversion — but a noisy, R&D-capitalization-sensitive P&L, a -12% revenue year and negative economic profit on the mttssn frame. At ~11x EV/FCF it is fairly valued, not cheap.
HOLD, medium conviction; base SEK 18 (~flat). The pipeline and buybacks are the swing factors; earnings quality and hit-dependence are why there is no margin of safety.
Every adjustment traces to the cited note/page in the source filing — click to open it there. Annual report / 10-K: 📄 open · Latest interim: 📄 open
| Adjustment / figure | Value | Source | Why mttssn treats it this way |
|---|---|---|---|
| Net sales / EBIT | 961 / 55 | Consolidated statement of profit or loss / p.25 📄 p.25 | Reported FY2025/26 top line and operating profit; EBIT down from 322 on lower sales, lower capitalization rate and IAC. |
| Development capitalized (own-use) | 120 | P&L 'Work performed by the Company for its own use and capitalized' / p.25 📄 p.25 | Capitalized game development inflates EBIT; mttssn reverses capitalization by removing this credit. |
| Amortization of internally-generated dev | -203 | Note 12 completed-development-projects amortization / p.41 📄 p.41 | Added back to EBIT as the offsetting leg of the R&D-capitalization reversal (net reversal +83). |
| Acquisition-related (PPA) amortization | 156 | Note 12 IP-rights amortization / p.41 📄 p.41 | Company adds this back in Adjusted EBIT; mttssn rejects the addback — real recurring cost of acquired revenue-generating game IP. |
| Items affecting comparability | -75 (listing -33, restructuring -11, impairment -31) | IAC note / p.71 📄 p.71 | Listing (33) and restructuring (11) normalized as one-offs; impairment (31) kept as real cost of failed capitalized R&D. |
| Goodwill / Intangibles carrying | 2,028 / 852 | Statement of financial position, Notes 11 & 12 / p.26,39-41 📄 p.26 | Goodwill 66% of intangible+goodwill base; internally-generated dev (242+201=443) removed from IC; acquired IP-rights (409) retained. |
| Total equity / NCI / Reserves(OCI) | 3,644 / 19 / 99 | Statement of financial position — equity / p.27 📄 p.27 | Equity_ex_oci = 3,644 - 99 (FX translation reserve). NCI 19 tracked for PEBV, kept in IC. |
| Interest-bearing debt (leases) | 22 | Lease liabilities 6 + 16 / p.27 📄 p.27 | Only interest-bearing item post-listing; SEK 2,056m owner loans repaid. ROU peripheral → lease_liabilities_in_ic false. |
| Company Adjusted EBIT (APM) | 288 | Adjusted EBIT derivation / p.70 📄 p.70 | APM sanity-check: 288 = EBIT 55 + acq amort 156 + IAC 75 + personnel-acq 2; restated to our methodology → 184 vs our 182. |