Shares in Playside Studios Ltd (ASX: PLY) are down more than 40% over the past year, but if the team at Shaw and Partners are to be believed, they could more than double in the coming 12 months.
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Strong results posted on the back of new game
Playside last week released its FY26 results, with revenue of $54.9 million, higher than guidance of $50 to $53 million and up 13% on the previous year.
The company's EBITDA came in at $15.5 million, and net profit was $5.4 million.
A major development for the company during FY26 was the release of its game, Mouse: P.I. For Hire.
Playside Chief Executive Officer Benn Skender said:
There was clear demand for the title well before launch, and the team converted it with a polished, exceptionally well-reviewed game that has translated directly into strong sales and a franchise we can build on. That is a hard thing to get right in this industry, and it validates both the publishing model we have been building and the studios we choose to back. External Projects has been tougher this year and we have aligned our cost base accordingly. At the same time we have expanded our Business Development team and global presence because we view current conditions as cyclical rather than structural, and we intend to be well positioned as demand recovers. The award of several small projects in recent weeks has been a positive in this regard.
In the current year, the company will be releasing Game of Thrones: War for Westeros, and Dumb Ways to Build, the latter of which will be released in coming weeks.
Playside said Mouse: P.I. For Hire was the most successful game launch in the company's history, generating US$28 million in gross sales.
The company also said it had carried out a restructure, which had led to $12 million in annualised savings.
Shares looking cheap, broker says
Shaw and Partners said there was not much clarity on the outlook from the company, but with two new games in the pipeline, there was the possibility of an earnings boost.
That said, they were predicting a fall in earnings.
They said:
FY27 financial guidance is limited, with management highlighting continued MOUSE monetisation, Dumb Ways to Build launching in September, Game of Thrones: War for Westeros in 2H27 and ~$5m of incremental annualised cost savings. We forecast FY27 revenue of $45m (-19% YoY), EBITDA of $11m and cash burn of ~$11m, leaving ~$6m cash at year-end. Our forecasts assume relatively modest contributions from new game launches and External Projects, providing upside should either outperform.
Shaw and Partners has reduced their price target on Playside from 28 cents to 23 cents, still well above the current level of 11.5 cents.
Playside is valued at $56.6 million.
