in Mobile Gaming

#G5 Entertainment: Ranking check

Here’s the weekly ranking check for our top-pick G5 Entertainment.

It was another week of massive game releases for G5 with several games being launched for Kindle Fire and Nook. The highlights, in our opinion, were however the holiday-update for Virtual City Playground for all platforms and the simultaneous launch of Dark Arcana: The Carnival for both iPhone, iPad and Google. Download the game for iOS here: Dark Arcana: The Carnival HD – G5 Entertainment

Nominate Dark Arcana: The Carnival HD for Best Casual Game

“Dark Arcana: The Carnival” jump started in the top grossing iPad charts and is currently ranked #220 in the USA, #235 in UK, #158 in Germany, #133 in Japan, #135 in France, #107 in Spain, #151 in China and #80 in Russia. Not bad for a game that has been on the market for only 3 days.

(We are screening the app markets of Australia, Brazil, Canada, China, France, Germany, Italy, Japan, Netherlands, Russia, South Korea, Spain, Sweden, UK and USA).

Number of G5 Entertainment games among the top grossing charts for iOS:


The steady improvement of G5 games rankings comes amid rapidly growing overall market for apps. As we have written about previously, Fiksu’s App Store Competitive Index tracks the aggregate volume of downloads per day achieved by the top 200 ranked free iPhone apps in the U.S. In October, the Index dramatically increased by 33 percent to 5.40 million daily downloads from 4.07 in September.

App Store Competitive Index


Given the steady growth of the app market and the massive expansion of G5 Entertainment’s gaming portfolio, we believe the company is well set to achieve its revenue target of SEK 300m and an EBIT of SEK 100m in “a couple of years”. Assuming 90% growth p.a. (in-line with recent history) in combination with an assumed 30% EBIT margin, G5 could be able to realize an EPS of SEK 5.21 in 2013. To further illustrate the earnings potential of G5, have a look at the following sensitivity analysis:

We also continue to argue that a company that grows at the pace that G5 is doing and with such a profitability level should be trading at at least 15-20x 12-months forward looking earnings. This would imply a reasonable share price of SEK 75 – 100 based on expected 2013 earnings. As you can see in the graph above, applying a PE-ratio of 15x on the expected EPS level of SEK 5.21 implies a fair share price of SEK 78. At a PE-ratio of 20x, the share price would be >SEK 100. 

Finally, for all you G5 shareholders, it’s time to make a final effort to nominate your favourite G5 Entertainment games for the prestigious bestappever awards 2012. Don’t forget the recently published games as well, such as Dark Arcana. Games can be nominated in different categories (for more information see our recent article:

Nordic Investor
Nominate Dark Arcana: The Carnival HD for Best Casual Game

Nominate The Secret Society – Hidden Mystery for Best Free to Play Game

Nominate Virtual City Playground HD for Best Free to Play Game

Nominate Doomsday Preppers™ for Best Free to Play Game

Nominate Letters from Nowhere 2 for Best Puzzle Game

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