Frontier Developments Share Discussion Threads

[endion] 16/1/2019 15:58

To be fair, you were to a certain extent, the market just disagreed with you temporarily! Let's hope it all comes out in the wash.

[nimbo1] 16/1/2019 15:51

endion i thought i was ahead of the market at £15 ; )...sometimes it can make one look very silly indeed.

[endion] 16/1/2019 15:48

Well it's always about finding those shares where you can be ahead of the market. This certainly seems like one of them, especially at current prices.

[nimbo1] 16/1/2019 15:46

I personally think the move yest was about either a distressed seller or momentum investors from the lows getting out simply because the statement didn't have in flashing lights 'ahead of expectations'...even though for those of us that follow fdev closely we know in reality it was an ahead of expectations statement. you cannot assume the masses have the understanding many of us here do about the companies evolution. It's probably why the price will react well to the headlines about 300% increase in revenue in early feb - even though in reality it is old news. Lets see.

[endion] 16/1/2019 14:37

A lot of support and interest on the bid side, not many shares on offer on the ask for now all the way up through 916p. This is from Level 2 book on lse.

[endion] 16/1/2019 12:17

If we take near the upper limit of revenue for the year of £85m, minus costs of say £40m, Eps = £1.16. Which would give a current PE of 7.4.

[scooper72] 16/1/2019 10:48

Many thanks. I think that is what my kids call quick maths. They don't rate my English Lit degree.

[death by donut] 16/1/2019 09:29

Wish i didnt bunk off school so much back in the day DbD :-)

[mark4231] 16/1/2019 09:27

62 EPS estimate for first half of year + 20 EPS estimate for second half of year ?

[shanklin] 16/1/2019 09:26

The PE in Stockopedia shown in the "Growth and Value" box, is not based on past results. It is based on a weighted calculation of the forward estimated Net Profit (or EPS) calculations.

The EPS estimates are 41.8p for 18/19 and 24.4p for 19/20. With a year end at end of May, in EPS terms. this currently means 4.5 months of 41.8p and 7.5 months of 24.4p. This gives an overall EPS estimate of 30.92p. Hence the circa forward PE of 28.

[death by donut] 16/1/2019 09:25

Im wrong then .:-)DbD

[death by donut] 16/1/2019 09:24

My guess as an amateur also :-) , is he is adjusting for free cash per share.Fag packet:Eps 62p (his est) + free cash 20p= 82p = pe roughly 10Stand to be corrected of course as still a learner myself.DbD :-)

[mark4231] 16/1/2019 09:14

See dsct's rough calculation above, which gives 62p EPS just off the first half of the year. However, the only number we know is a revenue figure estimated by FDEV. So we've had to estimate margin, costs etc.. No idea what estimates Stockopedia use, do they use the revenue estimate from yesterday?

[endion] 16/1/2019 09:12

The pe 28 is based on previous years earnings, which was a year where no game was released and thus a "lull" year. H1 this year has brought in £64m compared to the same period last year of £19m. Hence a forward pe of 10.

[scooper72] 16/1/2019 08:56

Excuse an amateur- when I look at stockopedia, they give frontier a PE of 28. Could you help me understand how you get that down to 10. Many thnx

[mark4231] 16/1/2019 08:56

I'm sure atmospherics would be completely paid for DLC. Already the Horizons update has meant that some players have much more to their game compared to the base game - some people can land on planets, some can't. What excites me is that if the next paid DLC is atmospherics then that could introduce a whole new tranche of gameplay, almost a new game within a game - No Man's Sky type game within ED.

I'm still bemused by the share price reaction. I don't think it is related to politics. After all the overall market didn't fall yesterday. Maybe it needs the official results release next month for people to realise how well FDEV are doing and to understand that FDEV costs are relatively fixed regardless of the number of units sold. I'm sure the share price will come good eventually so holding tight. No brainer.

[shanklin] 16/1/2019 08:52

I do not really understand how this works but I don't understand how one maintains a game where some player are aware of the atmospherics and others are not. However if you "provide" atmospherics for everybody but charge for all the functionality that can sense, see and exploit the atmospherics, I wonder if that would be more straightforward than two (diverging?) versions of the game. It would presumably be sufficiently frustrating to be one the wrong side of this wall that there would be huge take up of the paid-for functionality.

[endion] 16/1/2019 08:38

Hmm... i doubt atmospherics would be free, its such a huge feature. Having said that, it would change the game quite dramatically for users with it compared to those who dont, and they may not want such a disconnect in gameplay. Also, providing the lure of atmospherics, but being unable to properly exploit the feature as you say, could incite more people to buy the paid for content.

Very low volume today so far! Only three trades.... maybe awaiting yet another vote result.

[shanklin] 16/1/2019 08:27

So you don't think that the atmospherics would be provided for free but whatever is needed to full exploit the atmospherics would be a paid for update?

[endion] 15/1/2019 17:07

I’ve also heard rumours of atmospherics for the next paid update. It’s been on the community wish list since the beginning. Interesting to hear that they are compartmentalising the updates in a way, allowing users to pay for which ones they want. I imagine that if you end up getting all the updates it would end up costing more than what they would have charged for the whole package, unless they offer a deal for those wanting to commit to getting all of them.

[nimbo1] 15/1/2019 16:43

The significant elite expansion is coming in 2019 and it will be paid for - its been planned for ages. If you go to the elite dangerous wiki pages.


Season 4

There are no announcements about the fourth season yet. The release date is 2019. Braben said after the Beyond season there are a lot of exciting things that they'll announce, some of which will be free and paid.[5]

Frontier will shift from the paid expansion model to major premium DLC that can be purchased. So rather than buying an expansion with multiple updates, you can purchase major updates separately.

David Braben commented in an AMA on 11 April 2017: “I don’t think people liked having to pay for multiple updates in one go, so that is something we are going to move away from. At this end of the ‘season’ it makes sense, as people can see the huge number of features we are delivering, but it makes for a higher price.”[6]

There are rumors that it will be the first editions of atmospheric landings and space legs. Maybe giant executive controlled capital ships. The Fleet Carrier is probably a DLC in 2019.

[endion] 15/1/2019 16:39

Based on that eps we are currently trading on a PE of 10, which is damn low for a growth tech stock. Should be closer to 25.

I would reckon your buy price may partly depend on the outcome of the vote tonight!

[ck1111] 15/1/2019 16:37

I don't think 2019 will be a dip. I would bet on a significant Elite expansion. There are over 4m players now and very happy with the game. It is ripe for a paid update.

[dsct] 15/1/2019 16:19

My guestimate of 24th Nov (#3974), not only seems a long while ago, but upon reviewing, quite wrong ! lol

I pessimistically thought 1.2m JWE sales, and £47.6m total revenue for H1 !

Using the £64m revenue from today's TU as a starting point
I've still kept the Gross Margin at 60%, so Cost of Sales £25.6m
Increased costs to the same as the previous full year (£21.3m).
Operating Profit (OP) therefore of £17.1m
EPS = 45p

If the gross margin remains at the historic 70% level, then OP and EPS increase to £23.5m and 62p respectively.

We know H2 isn't going to be anywhere near the H1 figures, and hopefully that won't be the mis-reported information, just the record YE results, but before then we've the record H1 headlines :o)

Depending on when Franchise 4 is launched, 2019/20 could be another 'dip' year, and the comparison to this (18/19) record year will appear, to those not understanding this, as being poor. I wonder what ED, PC & JWE revenue would be if the F4 launch isn't until the end of the 19/20 year?

On a personal level, I'm now tempted at a 25% increase in my holding, and that will then be my long-term core holding. Not sure what buy-price target to hope for though ! lol

[endion] 15/1/2019 16:17

Team17 benefits from its names popularity and the success of the worms franchise. However Fdev have a bucket load more potential for growth compared to team17, whose market is largely the indie game/smaller game genre. Will be interesting to see how that one progresses.