Frontier Developments Stock Intrinsic Value – Investors Could Be Missing Out on 30% Potential Gains with Frontier Developments plc Fair Value Estimate of UK£6.86 by 2023.
March 19, 2023
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Investors may be missing out on potential gains of up to 30% with Frontier Developments ($LSE:FDEV) plc. This assessment was made by conducting a 2 Stage Free Cash Flow to Equity Model. This model determined that the estimated fair value of the company is UK£6.86, which is significantly higher than the current market price. The model takes into account both the current and projected financial performance of the company over the next five years. This implies that Frontier Developments plc’s profitability is expected to increase significantly over the next five years.
In addition, the model also considers other factors such as the company’s debt levels, its capital structure and its cost of capital.
Share Price
This presents a potential opportunity for investors to acquire FRONTIER shares at a discounted rate. The company’s current share price does not reflect the expected growth over the coming years, which is why many investors believe that FRONTIER shares could present a great opportunity for long-term returns. Given the potential upside, investors should consider investing in FRONTIER as soon as possible in order to capitalize on the company’s potential long-term returns. Live Quote…
About the Company
Income Snapshot
Below shows the total revenue, net income and net margin for Frontier Developments. More…
| Total Revenues | Net Income | Net Margin |
| 122.03 | 18 | 14.8% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for Frontier Developments. More…
| Operations | Investing | Financing |
| 64.71 | -49.17 | -6.49 |
Balance Sheet Snapshot
Below shows the total assets, liabilities and book value per share for Frontier Developments. More…
| Total Assets | Total Liabilities | Book Value Per Share |
| 173.51 | 46.82 | 3.21 |
Key Ratios Snapshot
Some of the financial key ratios for Frontier Developments are shown below. More…
| 3Y Rev Growth | 3Y Operating Profit Growth | Operating Margin |
| 28.9% | 13.8% | 8.0% |
| FCF Margin | ROE | ROA |
| 19.8% | 5.0% | 3.5% |
Analysis – Frontier Developments Stock Intrinsic Value
GoodWhale has undertaken an analysis of FRONTIER DEVELOPMENTS‘s wellbeing and have concluded that the intrinsic value of the company’s shares is approximately £24.3. This figure was calculated using our proprietary Valuation Line. Currently, FRONTIER DEVELOPMENTS stock is trading at £4.6, which is a significant 81.1% undervaluation. This presents an opportunity to investors who are looking to enter the market at a favourable cost. Our report has identified a number of fundamental strengths in the company which we believe will ensure long-term value for shareholders. More…
Peers
It has a large catalogue of titles and is renowned for its innovative and award-winning games. The company competes with other major developers such as Remedy Entertainment PLC, Fun Yours Technology Co Ltd, and TinyBuild Inc. These companies have established their own unique presence in the gaming industry, providing consumers with a variety of entertainment experiences.
– Remedy Entertainment PLC ($OTCPK:RMDEF)
Remedy Entertainment PLC is a Finnish video game developer and publisher based in Helsinki, Finland. Founded in 1995, the company is best known for developing the Max Payne franchise as well as Alan Wake and Quantum Break. As of 2022, Remedy Entertainment PLC has a market capitalisation of 308.37M and a Return on Equity (ROE) of 10.74%. This market cap represents the total value of the company’s outstanding shares and demonstrates the company’s financial health. The higher the ROE, the more profitable the company is – 10.74% indicates that Remedy Entertainment PLC is doing well financially.
– Fun Yours Technology Co Ltd ($TPEX:6482)
Fun Yours Technology Co Ltd is a multinational technology company that specializes in providing innovative solutions to the consumer market. The company has an impressive market cap of 803.57M as of 2022, making it one of the largest technology companies in the world. Its Return on Equity (ROE) of 15.32% is also quite impressive and shows that the company is a safe investment for investors. The company’s focus on innovation and customer service has allowed it to thrive in the highly competitive technology market.
– TinyBuild Inc ($LSE:TBLD)
TinyBuild Inc is a game development and publishing company based in Seattle, Washington. The company develops and publishes indie titles for PC, consoles and mobile platforms. Since its founding in 2011, TinyBuild has released over 60 titles, including SpeedRunners, Party Hard and Hello Neighbor. As of 2022, TinyBuild Inc has a market capitalization of 228.31M, making it one of the largest independent game publishing companies in the world. Additionally, the company has achieved a Return on Equity (ROE) of 11.68%, indicating that shareholders are receiving an adequate return on their investments.
Summary
Investors should take note of Frontier Developments plc, a British game developer and publisher. Their stock is trading at a 2023 fair value estimate of UK£6.86, representing a potential gain of 30%.
However, the stock price has moved down on the same day. Investors should carefully evaluate Frontier Developments’ risk factors, financials, and track record before committing funds. The company has seen strong revenue growth in recent years, but their profitability has been inconsistent.
Additionally, they are reliant on a limited number of customers and may be vulnerable to fluctuations in the gaming industry. It is important to thoroughly research Frontier Developments before investing to determine if they present an attractive opportunity.
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