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(Sharecast News) - Analysts at Berenberg lowered their target price on video games developer Everplay from 450p to 370p on Thursday amid investor concerns regarding higher-than-expected capital expenditure in FY26 and the year's "significant H2 weighting".
Berenberg noted Everplay shares have declined 10% following its FY25 results on 24 March and were down 38% over the last six months due to capex spend, the perceived threat posed by AI threat and several titles missing expectations.
The German bank said Everplay shares now trade on a FY26 price-to-earnings ratio of 8.4x and an free cashflow yield of 7.5% and highlighted that the stock has only traded at this valuation level twice before - following its 2023 downgrade from impairments and at the end of 2024 ahead of expectations of a miss in 2025.
"The strong pipeline with an own-IP focus leaves upside risk to forecasts, in our view," said Berenberg. "We forecast revenue growth of 7% in FY26, but this compares to underlying revenue growth of 5% in FY25, despite the stronger pipeline. Any outperformance of own-IP titles will lead to margin upside as incremental revenue will offset amortisation and lower royalties as percentage of revenues."
Reporting by Iain Gilbert at Sharecast.com
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