Fund Manager Summary
The outlook for Playside Studios Ltd appears promising, as fund managers believe the company is positioned for significant growth. They note that Playside delivered outstanding revenues of $23 million in the December quarter, resulting in positive operating cash flow of $11 million. In their opinion, the recent revenue guidance upgrade for FY24 to $60-65 million could be conservative given the strong quarterly performance. Furthermore, the acquisition of the licence for the MOUSE game, based on the popular Mickey Mouse brand, is expected to enhance the company’s market appeal and has already contributed to a rise in stock price. Overall, the fund managers express confidence in Playside's growth trajectory, highlighting its strong fundamentals and strategic acquisitions.
Source: Trading View
Commentary From The Managers
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Cyan Investment Management
31 Jan 2025
$0.22
Summary
- Cyan Investment Management sold their investment in Playside due to a significant forecast revenue pullback from ~$65m to ~$52m for FY25.
- The revised revenue largely stemmed from "Work for Hire" projects, which were previously viewed as stable and predictable.
- Major clients included Activision Blizzard, 2K Games, Meta, and Netflix, raising expectations for reliable revenue streams.
- The market reacted sharply to the news, reflecting a disconnect between perception and reality regarding the company's performance.
- This was not the first misstep for Playside; Cyan Investment Management had been gradually reducing their position during stock strength over the past two years.
- The initial investment was made pre-IPO at $0.16 in late 2020, and the company listed at $0.20 with forecast revenues of ~$10m for FY21.
- Despite a 5x revenue growth by FY25, Playside's stock trades at a price comparable to its IPO, highlighting potential inherent value.
- Market confidence may take time to rebuild, affecting the stock's recovery and management perception.
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Please note: The completeness, accuracy or current status of the investments referenced are not guaranteed.
Commentary From The Managers
Cyan Investment Management
31 Jan 2025
$0.22
- Cyan Investment Management sold their investment in Playside due to a significant forecast revenue pullback from ~$65m to ~$52m for FY25.
- The revised revenue largely stemmed from "Work for Hire" projects, which were previously viewed as stable and predictable.
- Major clients included Activision Blizzard, 2K Games, Meta, and Netflix, raising expectations for reliable revenue streams.
- The market reacted sharply to the news, reflecting a disconnect between perception and reality regarding the company's performance.
- This was not the first misstep for Playside; Cyan Investment Management had been gradually reducing their position during stock strength over the past two years.
- The initial investment was made pre-IPO at $0.16 in late 2020, and the company listed at $0.20 with forecast revenues of ~$10m for FY21.
- Despite a 5x revenue growth by FY25, Playside's stock trades at a price comparable to its IPO, highlighting potential inherent value.
- Market confidence may take time to rebuild, affecting the stock's recovery and management perception.
Summary
Cyan Investment Management
31 Aug 2024
$0.58
- Cyan Investment Management continues to hold its position in Playside Studios Ltd.
- The company reported outstanding results for FY24.
- Revenue increased by 70% to $65 million.
- EBITDA reached $18 million.
- Playside maintains a net cash position of $37 million.
- The recent share price decline of -19% appears disproportionate to the financial results.
- The reasons for the price movement are unclear, potentially linked to weakness in the US tech space.
- Playside has significant clients such as Netflix, Meta, and Activision Blizzard.
Summary
Cyan Investment Management
10 Apr 2024
$0.92
- Cyan Investment Management nominates Playside Studios Ltd as a top stock pick in the past decade.
- Fergie initially bought into Playside at its IPO in late 2020.
- The position has been expanded over time as the company has demonstrated its capabilities.
- Playside is considered an outlier in the gaming industry, known for high turnover.
- The company has established significant partnerships with major clients, including Facebook parent Meta, Activision, and Blizzard.
- Upon acquiring Playside, Cyan Investment Management noted strong revenue and a clear path to profitability.
- Executive ownership is robust, with three executives each holding around 20%, indicating strong alignment with shareholders.
- The stock experienced volatility, peaking at $1.20 during the NFT trend, generating $10 million in a single quarter.
- Currently, the stock price is approximately 90 cents, representing significant growth since Cyan Investment Management first invested.
Summary
Cyan Investment Management
29 Feb 2024
$0.90
- Playside Studios has emerged as a strong performer with a 23% increase in value for the month.
- The company reported a remarkable 119% revenue growth, reaching $36.2m.
- EBITDA reached $12.2m, showcasing operational efficiency.
- Net operating cash flow stood at $12.8m, indicating strong liquidity.
- All segments of the business are performing well, underscoring operational strength.
- Cyan Investment Management notes strong investor support for Playside as it embarks on a multi-layered growth plan.
- The growth plan is targeted over the next 24 months to enhance overall performance.
Summary
Cyan Investment Management
31 Jan 2024
$0.73
- Playside Studios (PLY) has seen an impressive growth, recording a 17% increase in value during the month.
- The company delivered notable revenues of $23 million in the December quarter, resulting in positive operating cash flow of $11 million.
- PLY has upgraded its revenue guidance for FY24 to $60-65 million, which may still be considered conservative given recent performance.
- The acquisition of the license for the upcoming MOUSE game, a retro game based on the now off-patent Mickey Mouse brand, could further boost revenue and stock performance.
- Cyan Investment Management continues to hold a positive view on Playside Studios, citing strong quarterly sales and upcoming projects as key factors in their investment thesis.
Summary
Please note: The completeness, accuracy or current status of the investments referenced are not guaranteed.
ANALYST INSIGHT
Equity Research Analyst
"With a stellar revenue leap and a promising new license, Playside Studios appears poised to redefine gaming dynamics. The recent guidance upgrade hints at a potentially conservative outlook, suggesting investors may be just scratching the surface of its true potential."
Last Updated: 31 Jan 2025
Query The Data
Frequently Asked Questions
Who is investing in Playside Studios Ltd (ASX:PLY)?
Fund managers including Cyan Investment Management have invested in Playside Studios Ltd (ASX:PLY).
Why do fund managers invest in Playside Studios Ltd?
Fund managers are investing in Playside Studios Ltd due to its robust financial performance, highlighted by a December quarter revenue of $23 million and positive operating cash flow of $11 million. The company's consistent revenue guidance upgrades for FY24, now projected at $60-65 million, indicate strong growth potential. Additionally, the acquisition of a license for the popular retro game MOUSE, based on the Mickey Mouse brand, further enhances its market position and investor confidence.
What happened to Playside Studios Ltd (ASX:PLY)?
There have been no recent updates from fund managers regarding Playside Studios Ltd although fund managers including Cyan Investment Management have previously commented.