AIM:FDEV

Stock Analysis Report

Frontier Developments

Executive Summary

Frontier Developments plc develops and publishes video games for the interactive entertainment sector in the United Kingdom and internationally.

Rewards

Earnings are forecast to grow 21.62% per year

Earnings grew by 384.4% over the past year

Risk Analysis

Shareholders have been diluted in the past year



Snowflake Analysis

Flawless balance sheet with outstanding track record.


Similar Companies

Share Price & News

How has Frontier Developments's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: FDEV has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

2.7%

FDEV

-0.3%

GB Entertainment

2.3%

GB Market


1 Year Return

46.2%

FDEV

8.4%

GB Entertainment

10.7%

GB Market

Return vs Industry: FDEV exceeded the UK Entertainment industry which returned 8.4% over the past year.

Return vs Market: FDEV exceeded the UK Market which returned 10.7% over the past year.


Shareholder returns

FDEVIndustryMarket
7 Day2.7%-0.3%2.3%
30 Day0.3%1.7%2.3%
90 Day17.2%-4.8%2.5%
1 Year46.2%46.2%15.6%8.4%16.5%10.7%
3 Year394.2%394.2%49.6%-29.2%21.3%5.9%
5 Year403.3%403.3%76.3%-13.6%41.1%8.7%

Price Volatility Vs. Market

How volatile is Frontier Developments's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

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

27.04x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: FDEV (£12.28) is trading above our estimate of fair value (£10.48)

Significantly Below Fair Value: FDEV is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: FDEV is poor value based on its PE Ratio (27x) compared to the Entertainment industry average (22.3x).

PE vs Market: FDEV is poor value based on its PE Ratio (27x) compared to the UK market (17.6x).


Price to Earnings Growth Ratio

PEG Ratio: FDEV is poor value based on its PEG Ratio (1.3x)


Price to Book Ratio

PB vs Industry: FDEV is overvalued based on its PB Ratio (6.6x) compared to the GB Entertainment industry average (2.4x).


Next Steps

Future Growth

How is Frontier Developments forecast to perform in the next 1 to 3 years based on estimates from 10 analysts?

21.6%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: FDEV's forecast earnings growth (21.6% per year) is above the savings rate (0.5%).

Earnings vs Market: FDEV's earnings (21.6% per year) are forecast to grow faster than the UK market (12.3% per year).

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

Revenue vs Market: FDEV's revenue (14.8% per year) is forecast to grow faster than the UK market (3.5% per year).

High Growth Revenue: FDEV's revenue (14.8% 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 high in 3 years time (21.3%)


Next Steps

Past Performance

How has Frontier Developments performed over the past 5 years?

56.7%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: FDEV has high quality earnings.

Growing Profit Margin: FDEV's current net profit margins (19.4%) are higher than last year (10.5%).


Past Earnings Growth Analysis

Earnings Trend: FDEV has become profitable over the past 5 years, growing earnings by 56.7% per year.

Accelerating Growth: FDEV's earnings growth over the past year (384.4%) exceeds its 5-year average (56.7% per year).

Earnings vs Industry: FDEV earnings growth over the past year (384.4%) exceeded the Entertainment industry 23.2%.


Return on Equity

High ROE: FDEV's Return on Equity (24.3%) is considered high.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Frontier Developments's financial position?


Financial Position Analysis

Short Term Liabilities: FDEV's short term assets (£40.7M) exceed its short term liabilities (£11.0M).

Long Term Liabilities: FDEV's short term assets (£40.7M) exceed its long term liabilities (£1.4M).


Debt to Equity History and Analysis

Debt Level: FDEV is debt free.

Reducing Debt: FDEV has no debt compared to 5 years ago when its debt to equity ratio was 0.7%.

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

Inventory Level: FDEV has a low level of unsold assets or inventory.

Debt Coverage by Assets: Insufficient data to determine if FDEV's debt is covered by short term assets.


Next Steps

Dividend

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


Dividend Yield vs Market

companyn/amarketbottom25%1.9%markettop25%5.1%industryaverage1.8%forecastin3Years0%

Current dividend yield vs market & industry

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

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


Current Payout to Shareholders

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


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of FDEV's dividend in 3 years as they are not forecast to pay a notable one for the UK market.


Next Steps

Management

What is the CEO of Frontier Developments's salary, the management and board of directors tenure and is there insider trading?

7.5yrs

Average board tenure


CEO

David Braben (55yo)

0yrs

Tenure

UK£309,000

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 ($USD412.08K) is below average for companies of similar size in the UK market ($USD1.15M).

Compensation vs Earnings: David's compensation has been consistent with company performance over the past year.


Board Age and Tenure

7.5yrs

Average Tenure

55yo

Average Age

Experienced Board: FDEV's board of directors are considered experienced (7.5 years average tenure).


Insider Trading

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


Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 2.2%.


Management Team

  • David Braben (55yo)

    Founder

    • Tenure: 0yrs
    • Compensation: UK£309.00k
  • Alex Bevis (43yo)

    CFO, Company Secretary & Executive Director

    • Tenure: 2.7yrs
    • Compensation: UK£309.00k
  • Jonny Watts (50yo)

    Chief Creative Officer & Executive Director

    • Tenure: 7.8yrs
    • Compensation: UK£331.00k
  • Yvonne Dawes

    HR Manager

    • Tenure: 0yrs
  • Stewart Stanbury

    Director of Marketing

    • Tenure: 2.3yrs

Board Members

  • Charles William Cotton (72yo)

    Non-Executive Director

    • Tenure: 3.4yrs
    • Compensation: UK£36.00k
  • David Gammon (58yo)

    Non-Executive Chairman

    • Tenure: 7.5yrs
    • Compensation: UK£66.00k
  • James Mitchell (45yo)

    Non-Executive Director

    • Tenure: 2.3yrs
  • David Braben (55yo)

    Founder

    • Tenure: 0yrs
    • Compensation: UK£309.00k
  • Alex Bevis (43yo)

    CFO, Company Secretary & Executive Director

    • Tenure: 2.7yrs
    • Compensation: UK£309.00k
  • David Walsh (55yo)

    Non-Executive Director

    • Tenure: 18.3yrs
    • Compensation: UK£159.00k
  • Jonny Watts (50yo)

    Chief Creative Officer & Executive Director

    • Tenure: 7.8yrs
    • Compensation: UK£331.00k

Company Information

Frontier Developments plc's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Frontier Developments plc
  • Ticker: FDEV
  • Exchange: AIM
  • Founded: 1994
  • Industry: Interactive Home Entertainment
  • Sector: Media
  • Market Cap: UK£471.664m
  • Shares outstanding: 38.41m
  • Website: https://www.frontier.co.uk

Number of Employees


Location

  • Frontier Developments plc
  • 26 Science Park
  • Milton Road
  • Cambridge
  • Cambridgeshire
  • CB4 0FP
  • United Kingdom

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
FDEVAIM (London Stock Exchange AIM Market)YesOrdinary SharesGBGBPJul 2013
FRRD.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDJul 2013

Biography

Frontier Developments plc develops and publishes video games for the interactive entertainment sector in the United Kingdom and internationally. It develops games across various platforms using its cross p ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/12/13 21:47
End of Day Share Price2019/12/13 00:00
Earnings2019/05/31
Annual Earnings2019/05/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.