FRONTIER DEVELOPMENTS Stock Price Struggles Despite Positive Financials
December 27, 2022
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Despite its positive financials, FRONTIER DEVELOPMENTS ($LSE:FDEV)’ stock has been trending down in recent months. The company’s stock has been steadily declining since late last year, even though its financials have remained strong.
Additionally, the company’s operating income more than tripled year-over-year in the same quarter, indicating a strong financial performance. Despite this, the stock has been unable to gain traction and continues to trend downwards. The primary reason for this could be the rising competition in the gaming industry. As the industry continues to grow, more and more companies are entering the market, creating strong competition for FRONTIER DEVELOPMENTS. These new entrants are creating innovative products and services that could potentially take away market share from FRONTIER DEVELOPMENTS. This is likely causing investors to be cautious with their investments in the company’s stock. Investors may also be concerned about the increasing cost of developing video games. Developing a new game is a complex and expensive process that can drain the company’s resources if not properly managed. This could lead to financial losses for the company and put downward pressure on its stock price. All in all, FRONTIER DEVELOPMENTS’ stock price has been struggling despite its positive financials. The company is facing increased competition from new entrants in the gaming industry, as well as increasing costs of game development. As such, investors may be hesitant to invest in the company’s stock until there is more clarity on how it will address these issues.
Share Price
On Wednesday, the company opened at £9.6 and closed at £9.7, up by 3.6% from its previous closing price of 9.4. This small increase is indicative of the stock’s struggles to maintain a steady price in the market. The company has seen numerous positive developments in the past year, with strong sales of its games and expansions into new markets.
In addition, their latest game “Elite Dangerous” has received critical acclaim and is enjoying strong sales. Despite this, the stock price has yet to truly reflect this success. There are several potential reasons for the lack of enthusiasm for the stock. The gaming market is notoriously volatile, and Frontier Developments’ focus on niche titles may be limiting its potential for growth.
Additionally, the company’s relatively small size compared to larger competitors in the industry could be a factor in its stock price struggles. Overall, Frontier Developments has seen positive financials and news sentiment, but that has not been enough to drive up the stock price. If the company can continue to garner strong sales and critical praise for its titles, then it is possible that investors will begin to show more enthusiasm for the stock. 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 |
| 114.03 | 9.63 | 8.4% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for Frontier Developments. More…
| Operations | Investing | Financing |
| 41.16 | -38.69 | -6.17 |
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 |
| 169.58 | 51.21 | 3 |
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 |
| 8.3% | -57.0% | 1.3% |
| FCF Margin | ROE | ROA |
| 2.1% | 0.8% | 0.6% |
VI Analysis
Investors looking for long term potential should take a look at Frontier Developments. Its fundamentals are easily analysed with the help of the VI app. The VI Star Chart indicates that Frontier Developments is strong in growth and profitability, medium in assets and weak in dividend. It also has a high health score of 8/10 with regard to its cashflows and debt, which is a good indication of its ability to sustain future operations in times of crisis. Frontier Developments is classified as ‘rhino’, a type of company that has achieved moderate revenue or earnings growth. Investors who are interested in investing in companies with long-term potential, companies with strong financial stability, moderate growth and profitability, and those who are looking for strong cash flows and debt management would be interested in Frontier Developments. This type of investor would have the confidence to support the company’s long-term strategy, but would also be comfortable with the company’s moderate growth. These investors could benefit from Frontier Developments’ ability to survive any possible economic downturns and its consistent revenue and earnings growth. More…
VI 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
FRONTIER DEVELOPMENTS has seen its stock price struggle despite strong financials and positive news sentiment. Despite this, the stock price moved up on the same day. Investing analysis suggests that the company is in a strong position and is a good candidate for potential investors. With their solid financials, Frontier Developments could be a great option to consider for those looking to invest in the long-term.
