Frontier Developments – is this a good gamble for the gamers? The Trading Update next Wednesday will show the way, shares 456p, broker TP 675p

Mark Watson-Mitchell - 04.06.2026

Is this one for the gamers amongst you?

Ahead of next Wednesday, 10^th June, it could well be worth looking very closely at the shares of the £156m-capitalised Frontier Developments (LON:FDEV), the highly cash-generative developer and publisher of video games.

The group has announced that it expects to be providing its post‑year‑end Trading Update on the 10^th.

The group’s shares are currently trading at 456p, but brokers have set Target Prices almost 50% higher.

The Business

Frontier Developments is a leading independent developer and publisher of video games, specialising in creative management simulation (CMS) experiences.

Based in Cambridge, Frontier develops and nurtures globally successful game franchises, including core CMS franchises such as Planet Coaster, Planet Zoo, and Jurassic World Evolution, using its proprietary COBRA technology.

The CMS genre underpins Frontier's strategy, which is driving long-term and sustainable growth through strong player engagement, robust back-catalogue performance, and an exciting pipeline of new games.

Latest Update

Less than a month ago, on Tuesday, 12^th May, the group upgraded its financial guidance for the year to end-May.

It stated that it was now expecting revenue of approximately £103.0m, with an adjusted operating profit of around £16.0m.

The improvement was driven by the success of Jurassic World Evolution 3 and strong ongoing sales, alongside higher tax credits.

The company maintained strong cash generation, with cash at end-April reaching £44.9m, despite investing £15.4m in share buybacks, which reduced total voting rights by 10% and are expected to enhance earnings per share.

The Update declared that the group was working on the delays in further content for Jurassic World Evolution 3, with the company looking to return to its planned roadmap.

The upgrade reflects higher-than-anticipated tax credits following a transition from the Video Games Tax Relief regime to Video Games Expenditure Credits, together with stronger-than-expected revenue performance and continued cost discipline.

Management Comment

CEO Jo Cooke stated that:

"I am delighted with Frontier's performance in FY26.

The success of Jurassic World Evolution 3 and the enduring appeal of our games underline the creativity of our teams and the depth of talent across the studio.

Since stepping into the CEO role earlier this year, I have been encouraged by the strength of our established CMS portfolio and the clarity of our long‑term strategy as we continue to build enduring relationships with our players."

The Equity

There are some 39,478,535 shares in issue, of which 3,947,854 shares are held in Treasury.

The larger holders include David Braben (34.41%), Schroder & Co Private Banking (32.64%), Tencent Holdings (9.53%), HSBC Global Asset Management Hong Kong (9.53%), Viking Capital Corp (7.42%), Invesco Advisers (6.31%), Working Capital Advisors UK (5.13%), JPMorgan Asset Management (4.96%), UBS Asset Management UK (4.55%), Acadian Asset Management (3.27%), Hargreaves Lansdown Asset Management (3.1%), and Interactive Investor (3.0%).

Brokers Views

Six broking firms follow the group, the consensus of their analysts suggest an average Target Price of 629p for the group’s shares, with 675p being the Highest and 600p the Lowest.

Three weeks ago, analyst Patrick O’Donnell at Goodbody, reiterated his ‘Buy’ recommendation following Update from the video game developer.

He stated that its shares are too cheap given the multiple earnings upgrades it is delivering.

“The group reported it was trading ahead of expectations and now expects revenues of £103m thanks to outperformance of the Jurassic World Evolution 3 release.

The latest upgrade, both on top and bottom line, highlights the continued momentum regarding its strategic pivot back into creative management stimulation titles where it is generating an improving return on investment.”

O’Donnell also looked favourably on the full-year 2027 pipeline which signals continued momentum on both top and bottom line.

At Zeus Capital, its analysts Lorne Daniel and Bob Liao, rate the group’s shares as a Buy with a 620p Target Price.

They feel that they offer good value in the light of the upgraded earnings.

Their estimates for the year to end-May are for revenues of £103.0m (£90.6m), with pre-tax profits of £9.8m (£12.4m), generating earnings of 29.0p (42.4p) per share.

However, they are either conservative or too cautious, for the current year they foresee sales of £100.5m, profits of £7.3m and 24.2p per share in earnings.

Then slipping to £95.0m sales in 2028, with £5.1m profits and 19.2p earnings per share.

In My View

It will be very interesting to see just what the group says next week about its current year prospects and those for next year.

What must not be missed is the fact that this games developer is very cash-generative – with brokers estimating that its net cash at end-May was £46.4m (£42.5m), for this year it could end on £54.1m net cash, then up to £56.9m next year.

That compares favourably with the group’s £156m market capitalisation.

I expect to see some useful revisions to broker estimates being given next week.