Frontier Developments Share Discussion Threads

[parob] 04/4/2024 10:09

There is always the possibility of a takeover too whilst the price is in the doldrums.

[7rademark] 04/4/2024 10:05

Once the market digests the recent trading update I can't see a reason why 500p is not attainable relatively quickly. A given imo when you also throw in the recent 20% cut of costs. The website states 800 employees maybe its less now.

[7rademark] 04/4/2024 10:02

39m shares in issue if I'm correct. With 22m held by directors and institutions. So only 17m in free float. Not a problem when the share price is at 20 or 30 quid. But at £2 it can create wild share price swings over a short period of time. Eg 600p to 200p in just 8 weeks recently.

[mortal1ty] 04/4/2024 09:22

Crazy to think even if it got to £5 it would still be 84% down from its peak! Probably wouldn't even seen the move upwards on the 5 year chart.

[mortal1ty] 04/4/2024 09:21

Well £5 would be 2x sales. Not sure it will get there for a while.

I think £2.50 - £3 is a very doable short-term target. That is c.1x sales.

I think the share price gets there alone on just the £23m cash, and the fact it 'isn't going bankrupt' and is 'meeting expectations'.

[parob] 04/4/2024 09:18

Nice move on the cards now the trading range has been broken especially having been stuck in it for so long. It will close the gap on the chart as the very first step now imo.

[7rademark] 03/4/2024 19:20

Thanks will do some more research tonight but I'm in with a few k. Will add more as I see fit but it looks as though we may see some momentum here. Gla.

[mortal1ty] 03/4/2024 17:14

Parob - Sounds like that guy has been stealing my analysis ;)

[mortal1ty] 03/4/2024 17:13

Crazy how the market works. In reality it wasn't worth £1bn... just like it wasn't worth £30m!

I don't really know what it is worth... only that at a minimum it is 2x where it is now.

I think £100m sales, 15% EBITDA margin => £15m EBITDA. Put that on 8x = £150m EV. Add the cash = £180m market-cap. That would be 3x where it is currently.

That's without a huge amount of growth forecast. Just sensible financial management.

[parob] 03/4/2024 17:11

This chap thinks possible 10/15 bagger when he tweeted in Jan. Thread worth a read:hTTps://x.com/10_ch_10/status/1748823592681308377?s=46&t=_ybVnpe01AP_F1Pw0JqKTg

[rimau1] 03/4/2024 17:05

And during those good days FDEV hit a gbp1bn valuation.

[parob] 03/4/2024 17:05

Good summary :)

[mortal1ty] 03/4/2024 16:43

7rademark.

It has been a long and drawn out story. But broadly it is this.

The good days (pre-2020): The company had a succession of successful titles. These titles were fairly low-risk sim games that were well executed. Elite Dangerous -> Planet Coaster -> Planet Zoo -> Jurassic World -> Jurassic World 2. Each game was a success.

The bad days (2020-2023): Towards the end of the last period David Braben began believing his own hype, and the company lost control. They took projects that were higher-risk, and then executed poorly on them. They launched into new ventures such as Frontier Publishing which was a completely failure. Elite Odyssey, Warhammer, and F1 manager were all flops. Meanwhile cash starts dropping, other video games companies start going under. Everyone flees.

The better days? (2024+): Company secured financial stability. Cash never dropped as much as people thought, because they have such a good back catalogue of games which they release DLCs for. They also took out 20% of cost. More recently they sold off some old IP. Anyways, I think cash at year-end was forecast to be £5m, and it looks like £25m (that is 30% of the market-cap). Management have refocused on low-risk sims, so the pipeline has more thought behind it. Planet Zoo to console has been a success. Later on in the year we might have Planet Coaster 2 which will be low risk.

Valuation = 0.5x sales if you strip out cash. Team 17 I think on 2.5x sales.

So its easily a 5 bagger if they get things sorted again, which I believe they are.

[parob] 03/4/2024 16:34

Very nice close. Will attract technical traders now we've broken out of the trading range.

[rimau1] 03/4/2024 16:31

I would say that this is a break-out...nice

[7rademark] 03/4/2024 16:31

It was your rec put me on to this. Elite was massive when I was in my youth. What did DB do wrong and what was the ATH

[mortal1ty] 03/4/2024 16:30

Although I have to admit I stopped looking when the shares reached £1. Should have bought another 0.2%.

[mortal1ty] 03/4/2024 16:29

People laughed when I told them I bought 0.2% of the company.

Not laughing anymore!

[7rademark] 03/4/2024 16:15

30 quid a share 36 months ago what went wrong. Was that the high.

[7rademark] 03/4/2024 16:10

I'm in today. Only 39m shares in issue with a low mcap and loads of cash. It looks like yesterday's update has been overlooked by the market.

[parob] 03/4/2024 09:12

I entered a couple of months back and am waiting for it to break the trading range it’s been stuck in for the last 4 months or so, before adding more. Once that has been broken there’s a good chance this will go on a decent run and could be a long term recovery stock if all goes to plan. Directors were buying heavily a few months back. Cash was much better than I expected in yesterday’s trading update, and isn’t that far off 50% of the current market cap. Seems to be under the radar at the mo but hopefully that will change soon.

[rimau1] 03/4/2024 09:08

Otherwise the downtrend is intact?

[parob] 03/4/2024 09:02

Looking for a close of 162p+ then will add more.

[mortal1ty] 02/4/2024 08:41

I was about to comment this morning that Planet Zoo on console was doing well. I'm guessing management waited until the launch to put out the update.

[koypetition81] 02/4/2024 08:33

gg, train is leaving