Shore Capital has slapped a "sell" rating on tinyBuild, warning that a sharp share price rally has left the video games publisher looking expensive despite an upbeat trading performance.
The broker cut its recommendation two notches from "hold", with a price target of 9p, some 40% below the current 15p.
The downgrade is a matter of valuation rather than performance.
tinyBuild, the AIM-listed developer and publisher behind titles sold on Valve's Steam platform, said first-half results and current trading were materially ahead of expectations, driven by strong recent releases.
Management now expects full-year earnings to beat previous forecasts, prompting Shore Capital to lift its numbers.
The broker raised its 2026 revenue forecast 22% to $47 million and its EBITDA estimate 18% to $5 million.
The pipeline looks promising too, with four upcoming titles ranked among Steam's most anticipated releases.
Among them is Kingmakers, which has drawn a positive early response from gamers, though Shore Capital reckons it is more likely to launch in 2027 than this year given the lack of a confirmed date.
The balance sheet is a clear strength, with net cash of $4.7 million and no debt, giving room to keep investing in games and new intellectual property.
The problem is the price.
After a run that has seen the shares climb 36% over the past year, tinyBuild trades on 17 times forecast 2026 earnings before interest, tax, depreciation and amortisation.
That is well ahead of listed peers on high single digits.
With few near-term catalysts, Shore Capital sees the risk to the shares skewed to the downside.
