Frontier DevelopmentsCHIX:FDEVL -0.68%49 WACC % is 10.22% as of Jun. 25, 2026, which is 54% above its 10-year median of 6.62. GuruFocus rates CHIX:FDEVL with a GF Score™ of 49/100 and a GF Value™ of £2.80 (Significantly Overvalued). The stock has 3 warning signs investors should review. Among 571 Interactive Media companies, Frontier Developments ranks worse than 73.2% on this metric.
As of today (2026-06-25), Frontier Developments's weighted average cost of capital is 10.22%%. Frontier Developments's ROIC % is 14.91% (calculated using TTM income statement data).
Frontier Developments generates higher returns on investment than it costs the company to raise the capital needed for that investment. It is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases.
*Note: The beta of this company cannot be obtained because it has a price history shorter than 3 years. It will thus be set to 1 as default to calculate WACC.
For a comprehensive WACC calculation, please access the WACC Calculator.
Because it costs money to raise capital. A firm that generates higher ROIC % than it costs the company to raise the capital needed for that investment is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases, whereas a firm that earns returns that do not match up to its cost of capital will destroy value as it grows.
As of today, Frontier Developments's weighted average cost of capital is 10.22%%. Frontier Developments's ROIC % is 14.91% (calculated using TTM income statement data).
Frontier Developments generates higher returns on investment than it costs the company to raise the capital needed for that investment. It is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases.
*Note: The beta of this company cannot be obtained because it has a price history shorter than 3 years. It will thus be set to 1 as default to calculate WACC.
Be Aware
1. GuruFocus uses book value of debt (D) to do the calculation. It is simplified by adding latest one-year semi-annual average Short-Term Debt & Capital Lease Obligation and Long-Term Debt & Capital Lease Obligation together.
For companies that report quarterly, GuruFocus combines all of the most recent year's quarterly debt data from the beginning of the year to the year-end and calculates the average.
For companies that report semi-annually, GuruFocus combines all of the most recent year's semi-annual debt data from the start of the year to the year-end and calculates the average.
For companies that report annually, GuruFocus combines the beginning and ending annual debt data from the most recent year and then calculates the average.
2. The WACC formula discussed above does not include Preferred Stock. Please adjust if preferred stock is considered.
3. (Expected Return of the Market - Risk-Free Rate of Return) is also called market premium. GuruFocus requires market premium to be 6%.
4. GuruFocus uses the latest TTM Interest Expense divided by the latest one-year semi-annual average debt to get the simplified cost of debt.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
For the Electronic Gaming & Multimedia subindustry, Frontier Developments's WACC %, along with its competitors' market caps and WACC % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Frontier Developments WACC % vs Interactive Media Industry
For the Interactive Media industry and Communication Services sector, Frontier Developments's WACC % distribution charts can be found below:
* The bar in red indicates where Frontier Developments's WACC % falls into.
The weighted average cost of capital (WACC) is the rate that a company is expected to pay on average to all its security holders to finance its assets. The WACC is commonly referred to as the firm's cost of capital. Generally speaking, a company's assets are financed by debt and equity. WACC is the average of the costs of these sources of financing, each of which is weighted by its respective use in the given situation. By taking a weighted average, we can see how much interest the company has to pay for every dollar it finances.
WACC
=
E
/
(E + D)
*
Cost of Equity
+
D
/
(E + D)
*
Cost of Debt
*
(1 - Tax Rate)
1. Weights:
Generally speaking, a company's assets are financed by debt and equity. We need to calculate the weight of equity and the weight of debt.
The market value of equity (E) is also called "Market Cap". As of today, Frontier Developments's market capitalization (E) is £139.996 Mil.
The market value of debt is typically difficult to calculate, therefore, GuruFocus uses book value of debt (D) to do the calculation. It is simplified by adding the latest one-year semi-annual average Short-Term Debt & Capital Lease Obligation and Long-Term Debt & Capital Lease Obligation together. As of Nov. 2025, Frontier Developments's latest one-year semi-annual average Book Value of Debt (D) is £19.4803 Mil.
a) weight of equity = E / (E + D) = 139.996 / (139.996 + 19.4803) = 0.8778
b) weight of debt = D / (E + D) = 19.4803 / (139.996 + 19.4803) = 0.1222
2. Cost of Equity:
GuruFocus uses Capital Asset Pricing Model (CAPM) to calculate the required rate of return. The formula is:
Cost of Equity = Risk-Free Rate of Return + Beta of Asset * (Expected Return of the Market - Risk-Free Rate of Return)
a) GuruFocus uses 10-Year Treasury Constant Maturity Rate as the risk-free rate. It is updated daily. The current risk-free rate is 4.9416%. Please go to Economic Indicators page for more information. Please note that we use the 10-Year Treasury Constant Maturity Rate of the country/region where the company is headquartered. If the data for that country/region is not available, then we will use the 10-Year Treasury Constant Maturity Rate of the United States as default.
b) Beta is the sensitivity of the expected excess asset returns to the expected excess market returns. Frontier Developments's beta cannot be obtained because it has a price history shorter than 3 years. It will thus be set to 1 as default to calculate WACC.
c) (Expected Return of the Market - Risk-Free Rate of Return) is also called market premium. GuruFocus requires market premium to be 6%.
Cost of Equity = 4.9416% + 1 * 6% = 10.9416%
3. Cost of Debt:
GuruFocus uses latest TTM Interest Expense divided by the latest one-year semi-annual average debt to get the simplified cost of debt.
As of Nov. 2025, Frontier Developments's interest expense (positive number) was £0.98 Mil. Its total Book Value of Debt (D) is £19.4803 Mil.
Cost of Debt = 0.98 / 19.4803 = 5.0307%.
4. Multiply by one minus TTM Tax Rate:
GuruFocus uses the most recent TTM Tax Expense divided by the most recent TTM Pre-Tax Income to calculate the tax rate. The calculated TTM tax rate is limited to between 0% and 100%. If the calculated tax rate is higher than 100%, it is set to 100%. If the calculated tax rate is less than 0%, it is set to 0%.
The latest calculated TTM Tax Rate = -3.995 / 16.006 = -24.96%, which is less than 0%. Therefore it's set to 0%.
Frontier Developments's Weighted Average Cost Of Capital (WACC) for Today is calculated as:
WACC
=
E / (E + D)
*
Cost of Equity
+
D / (E + D)
*
Cost of Debt
*
(1 - Tax Rate)
=
0.8778
*
10.9416%
+
0.1222
*
5.0307%
*
(1 - 0%)
=
10.22%
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Frontier Developments (CHIX:FDEVL) has a WACC % of 10.22% as of Jun. 25, 2026. The weighted average cost of capital (WACC) is the average rate a company pays to finance assets. View historical data on Frontier Developments and its competitors. This is 54% above median its historical median of 6.62. Over the past decade, Frontier Developments' WACC % has ranged from 3.11 to 11.72. According to the industry distribution chart, Frontier Developments ranks #418 out of 571 companies in the Interactive Media industry, placing it in the top 73.2%.
Is Frontier Developments' WACC % too high?
Frontier Developments' current WACC % of 10.22% is 54% above median its 10-year median of 6.62. Over the past 10 years, this metric has ranged from a low of 3.11 to a high of 11.72. The Interactive Media industry median WACC % is 7.12. Frontier Developments' value of 10.22% is 43.5% above this industry median. Based on the distribution chart, Frontier Developments ranks #418 out of 571 companies in the Interactive Media industry, which is below the industry midpoint. Overall, Frontier Developments has a GF Score™ of 49/100 and is considered Significantly Overvalued, reflecting its overall financial health beyond just this single metric.
How does Frontier Developments' WACC % compare to NTES and EA?
According to the Interactive Media industry distribution chart, Frontier Developments ranks #418 out of 571 companies for WACC %. This places Frontier Developments in the lower half of its industry. The industry median WACC % is 7.12. Frontier Developments' value of 10.22% is 43.5% above this benchmark. Historically, Frontier Developments' own WACC % has ranged from 3.11 to 11.72 over the past decade. While the company's 10-year median is 6.62 vs. the industry median of 7.12, Frontier Developments has consistently been above the industry average. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good WACC % for an Interactive Media company?
The median WACC % among Interactive Media companies is 7.12, based on 571 companies in the industry. Companies in the top quartile (top 25%) have a WACC % significantly above this median, while those in the bottom quartile fall well below. However, WACC % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Frontier Developments's current WACC % of 10.22% is 43.5% above the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high WACC % mean?
A high WACC % can signal that a stock is expensive relative to its fundamentals. The weighted average cost of capital (WACC) is the average rate a company pays to finance assets. View historical data on Frontier Developments and its competitors. For the Interactive Media industry, the median WACC % is 7.12 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Frontier Developments's current WACC % is 10.22%, which is 54% above median its own 10-year median of 6.62. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Frontier Developments stock overvalued right now?
Based on GuruFocus' analysis, Frontier Developments (CHIX:FDEVL) is currently considered Significantly Overvalued. The stock's GF Value™ is £2.80, compared to a current price of £4.02 — trading 43.4% above its estimated fair value. The current WACC % is 10.22%, which is 54% above median its 10-year median of 6.62 and 43.5% above the Interactive Media industry median of 7.12. Frontier Developments' overall GF Score™ is 49/100 with 3 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is WACC % calculated?
WACC % is calculated from a company's financial statements. For Frontier Developments (CHIX:FDEVL), the current WACC % is 10.22% as of Jun. 25, 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is Frontier Developments (CHIX:FDEVL) Overvalued in 2026?
Based on GuruFocus' analysis, Frontier Developments stock appears to be overvalued.
The current stock price of £4.02 is trading 43.4% above its estimated GF Value™ of £2.80.
GuruFocus considers Frontier Developments to be Significantly Overvalued.
Key valuation signals for CHIX:FDEVL:
WACC %: 10.22% (54% above median its 10-year median of 6.62)
GF Value™: £2.80 vs. price of £4.02 (43.4% above fair value)
Industry Position: 43.5% above the Interactive Media median (#418 of 571)
No single metric tells the full story. See the CHIX:FDEVL stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Frontier Developments PLC is a United Kingdom-based company that develops and publishes video games for personal computers and consoles. The company is known for titles such as the Elite series, Planet Coaster, Planet Zoo, and Jurassic World Evolution. It operates through game development and publishing, using in-house technology to create and distribute interactive entertainment software. Frontier Developments has one operating segment, being revenue from publishing games and revenue from other streams such as royalties and licensing. The majority of revenue is generated from Publishing revenue.
49GF Score
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