Frontier Developments (AIM:FDEV) - Share price, News & Analysis

FDEV fundamental analysis
Snowflake Score
Valuation	3/6
Future Growth	4/6
Past Performance	2/6
Financial Health	6/6
Dividends	0/6

FDEV Stock Overview

Frontier Developments plc develops and publishes video games for personal computers and videogame consoles in the United Kingdom.

Rewards

Trading at 36.2% below our estimate of its fair value

Earnings are forecast to grow 55.06% per year

Risk Analysis

Profit margins (13.7%) are lower than last year (22.3%)

Frontier Developments Competitors

Microsoft

NasdaqGS:MSFT

US$1.9t

Sony Group

TSE:6758

JP¥14.2t

Activision Blizzard

NasdaqGS:ATVI

US$60.5b

Nintendo

TSE:7974

JP¥7.0t

Price History & Performance

Summary of all time highs, changes and price drops for Frontier Developments
Historical stock prices
Current Share Price	UK£12.32
52 Week High	UK£29.00
52 Week Low	UK£10.80
Beta	0.75
1 Month Change	-2.53%
3 Month Change	-1.91%
1 Year Change	-51.40%
3 Year Change	23.45%
5 Year Change	203.45%
Change since IPO	697.41%

Recent News & Updates

Mar 08

Frontier Developments plc's (LON:FDEV) Intrinsic Value Is Potentially 75% Above Its Share Price

Today we'll do a simple run through of a valuation method used to estimate the attractiveness of Frontier Developments...

Feb 21

Frontier Developments (LON:FDEV) Will Be Hoping To Turn Its Returns On Capital Around

Finding a business that has the potential to grow substantially is not easy, but it is possible if we look at a few key...

Shareholder Returns

	FDEV	GB Entertainment	GB Market
7D	-2.7%	-0.3%	-0.4%
1Y	-51.4%	-41.1%	-4.0%

Return vs Industry: FDEV underperformed the UK Entertainment industry which returned -41.1% over the past year.

Return vs Market: FDEV underperformed the UK Market which returned -4% over the past year.

Price Volatility

Is FDEV's price volatile compared to industry and market?
FDEV volatility
FDEV Average Weekly Movement	6.0%
Entertainment Industry Average Movement	6.1%
Market Average Movement	6.2%
10% most volatile stocks in GB Market	11.6%
10% least volatile stocks in GB Market	3.2%

Stable Share Price: FDEV is not significantly more volatile than the rest of UK stocks over the past 3 months, typically moving +/- 6% a week.

Volatility Over Time: FDEV's weekly volatility (6%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1994	745	David Braben	https://www.frontier.co.uk

Frontier Developments plc develops and publishes video games for personal computers and videogame consoles in the United Kingdom. The company develops games across various platforms using its cross-platform technology, Cobra. It also publishes games developed by selected partner studios under its Frontier Foundry games label.

Frontier Developments Fundamentals Summary

How do Frontier Developments's earnings and revenue compare to its market cap?
FDEV fundamental statistics
Market Cap	UK£479.85m
Earnings (TTM)	UK£14.10m
Revenue (TTM)	UK£102.90m

34.0x

P/E Ratio

4.7x

P/S Ratio

Is FDEV overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
FDEV income statement (TTM)
Revenue	UK£102.90m
Cost of Revenue	UK£35.12m
Gross Profit	UK£67.78m
Other Expenses	UK£53.68m
Earnings	UK£14.10m

Last Reported Earnings

Nov 30, 2021

Next Earnings Date

n/a

Earnings per share (EPS)	0.36
Gross Margin	65.87%
Net Profit Margin	13.70%
Debt/Equity Ratio	0%

How did FDEV perform over the long term?

See historical performance and comparison

Valuation

Is Frontier Developments undervalued compared to its fair value and its price relative to the market?

Valuation Score

3/6

Valuation Score 3/6

Below Fair Value
Significantly Below Fair Value
PE vs Industry
PE vs Market
PEG Ratio
PB vs Industry

36.2%

Undervalued compared to fair value

Share Price vs. Fair Value

Below Fair Value: FDEV (£12.32) is trading below our estimate of fair value (£19.31)

Significantly Below Fair Value: FDEV is trading below fair value by more than 20%.

Price To Earnings Ratio

PE vs Industry: FDEV is poor value based on its PE Ratio (34x) compared to the UK Entertainment industry average (26.9x).

PE vs Market: FDEV is poor value based on its PE Ratio (34x) compared to the UK market (15.4x).

Price to Earnings Growth Ratio

PEG Ratio: FDEV is good value based on its PEG Ratio (0.6x)

Price to Book Ratio

PB vs Industry: FDEV is overvalued based on its PB Ratio (4.2x) compared to the GB Entertainment industry average (2.9x).

Future Growth

How is Frontier Developments forecast to perform in the next 1 to 3 years based on estimates from 13 analysts?

Future Growth Score

4/6

Future Growth Score 4/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

55.1%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: FDEV's forecast earnings growth (55.1% per year) is above the savings rate (0.9%).

Earnings vs Market: FDEV's earnings (55.1% per year) are forecast to grow faster than the UK market (11.3% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: FDEV's revenue (19.3% per year) is forecast to grow faster than the UK market (4% per year).

High Growth Revenue: FDEV's revenue (19.3% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: FDEV's Return on Equity is forecast to be low in 3 years time (17.6%).

Past Performance

How has Frontier Developments performed over the past 5 years?

Past Performance Score

2/6

Past Performance Score 2/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

23.4%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: FDEV has high quality earnings.

Growing Profit Margin: FDEV's current net profit margins (13.7%) are lower than last year (22.3%).

Past Earnings Growth Analysis

Earnings Trend: FDEV's earnings have grown significantly by 23.4% per year over the past 5 years.

Accelerating Growth: FDEV's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: FDEV had negative earnings growth (-22.1%) over the past year, making it difficult to compare to the Entertainment industry average (8.2%).

Return on Equity

High ROE: FDEV's Return on Equity (12.4%) is considered low.

Financial Health

How is Frontier Developments's financial position?

Financial Health Score

6/6

Financial Health Score 6/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: FDEV's short term assets (£63.9M) exceed its short term liabilities (£22.9M).

Long Term Liabilities: FDEV's short term assets (£63.9M) exceed its long term liabilities (£28.9M).

Debt to Equity History and Analysis

Debt Level: FDEV is debt free.

Reducing Debt: FDEV has not had any debt for past 5 years.

Debt Coverage: FDEV has no debt, therefore it does not need to be covered by operating cash flow.

Interest Coverage: FDEV has no debt, therefore coverage of interest payments is not a concern.

Balance Sheet

Dividend

What is Frontier Developments's current dividend yield, its reliability and sustainability?

Dividend Score

0/6

Dividend Score 0/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage

Dividend Yield vs Market

Notable Dividend: Unable to evaluate FDEV's dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.

High Dividend: Unable to evaluate FDEV's dividend yield against the top 25% of dividend payers, as the company has not reported any recent payouts.

Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if FDEV's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if FDEV's dividend payments have been increasing.

Earnings Payout to Shareholders

Earnings Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: Unable to calculate sustainability of dividends as FDEV has not reported any payouts.

Discover strong dividend paying companies

Management

How experienced are the management team and are they aligned to shareholders interests?

8.0yrs

Average board tenure

CEO

David Braben (57 yo)

28.33yrs

Tenure

UK£498,000

Compensation

Mr. David John Braben, O.B.E. founded Frontier Developments Plc in January 1994 and serves as its Chief Executive Officer and has been its Executive Director since January 1994. At Frontier, he has achieve...

CEO Compensation Analysis

Compensation vs Market: David's total compensation ($USD626.16K) is below average for companies of similar size in the UK market ($USD1.38M).

Compensation vs Earnings: David's compensation has increased by more than 20% whilst company earnings have fallen more than 20% in the past year.

Board Members

Experienced Board: FDEV's board of directors are considered experienced (8 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.

Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/05/23 00:00
End of Day Share Price	2022/05/23 00:00
Earnings	2021/11/30
Annual Earnings	2021/05/31