Are shares in lockdown winner Frontier Developments still worth a punt, or is it game over?


If you are searching for lockdown stock market winners look no further than Frontier Developments (AIM:FDEV), maker of the Zoo Tycoon and Disneyland Adventures console and computer games.

You’d have doubled your money had you invested in March last year. The resulting jump in value has seen Frontier join the billion-pound club of stock market businesses.

At GBP27 a share, or thereabouts, you’d expect the shares to have run their race.

Not so, according to analysts at Credit Suisse (NYSE:CS.), who have increased their price target for the stock to GBP30.60, rating it ‘outperform’.

“[An] exciting line-up of games should encourage investors,” the Swiss investment bank said in a note to clients.

“Relative to its size Frontier Developments has one of the most exciting line-ups of games releases in the industry over the next few years, with the strong potential to add even more titles.”

From its internal development, it has Jurassic World Evolution 2 in full-year 2022 as well as F1 Manager and Warhammer in 2023 and a new franchise the year after.

From its third-party publishing (Foundry) it has Lemnis Gate, Chaos Gate and Far Changing Tides in 2022 and at least three further titles in 2023, Credit Suisse pointed out.

“On our estimates this should produce around a 30% revenue CAGR [compound annual growth rate] over three years with over 50% growth in full-year 2022 alone,” the bank added.


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