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Video games Workshop (GAW) shares are on a meteoric rise that exhibits no indicators of easing.
Up 140% within the final 5 years, the tabletop gaming big breached the gates of the FTSE 100 final December. And it’s acquired 2025 off to a bang, up virtually 9% within the 12 months so far.
Video games Workshop’s share worth acquired a further enhance on Wednesday (5 March) after yet one more sturdy buying and selling replace. It mentioned that “buying and selling in January and February has been forward of expectations, with sturdy buying and selling throughout each the core enterprise and licensing“.
Consequently, it mentioned pre-tax revenue for the monetary 12 months to June 2025 “is estimated to be forward of expectations“. This pushed its share worth round 6% increased in mid-week enterprise.
Overvalued?
Greatest identified for its Warhammer gaming system, Video games Workshop units the usual within the quickly rising world of fantasy warfare gaming. Its share worth has rocketed, as gross sales of its miniatures have soared together with royalty revenues.
Core gaming gross sales rose 14.3% within the first half of the 12 months. Licencing revenues from video video games and different media, in the meantime, leapt 149%.
I’m assured of additional stratospheric royalties progress, too, below Video games Workshop’s not too long ago signed movie and TV cope with Amazon.
Can the Video games Workshop worth hold flying, although? In different phrases, is its large progress potential now baked into its excessive valuation?
The corporate’s worth growth means it now trades on a ahead price-to-earnings (P/E) ratio of 29.2 instances. That is greater than double the FTSE 100’s ahead common, and properly above a a number of of round 22 a 12 months in the past.
And whereas the corporate’s flying, it nonetheless faces important hazards which may dent its momentum. Gross sales are hovering, however new US commerce tariffs may considerably compromise future progress (the enterprise manufactures 100% of its product in Nottingham, England).
The enterprise has additionally, in latest instances, struggled to fulfill the tempo of demand for its merchandise. It warned in January that “we’re nonetheless not assembly our inventory availability KPIs and never all of our new product releases bought to our deliberate ranges“.
A monster share to think about
No share is with out threat, nevertheless. And on stability, I feel Video games Workshop’s share worth ought to carry on surging.
In addition to being a shareholder myself, I’m an enormous fan of the corporate’s merchandise (I’m presently constructing a mighty Soulblight Gravelords military, in case you’re questioning). So I prefer to assume I do know what I’m speaking about!
Video games Workshop has made topping forecasts a welcome behavior. Contemporary from beating brokers’ revenue estimates for the final monetary 12 months, the corporate mentioned in October it was on the right track to beat half-year forecasts for 2025, too, which it duly did.
As we speak’s replace retains the run going. I don’t assume the story’s over, both, given the sturdy, broad-based momentum the enterprise is having fun with, and the possibly large contribution of the Amazon deal.
Analysts at Peel Hunt have hiked their Video games Workshop worth goal to £15 per share from £14.40 following at present’s market replace. And so they say that “the shares have carried out properly, however there continues to be clear momentum“. I count on additional important appreciation within the months and years forward. At present, I’m pleased holding the shares I’ve as a part of a diversified portfolio.
