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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 nearly 9% within the 12 months so far.
Video games Workshop’s share worth acquired an extra increase on Wednesday (5 March) after one more robust buying and selling replace. It stated that “buying and selling in January and February has been forward of expectations, with robust buying and selling throughout each the core enterprise and licensing“.
Consequently, it stated 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% greater in mid-week enterprise.
Overvalued?
Greatest recognized for its Warhammer gaming system, Video games Workshop units the usual within the quickly rising world of fantasy battle 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 development, too, beneath Video games Workshop’s just lately signed movie and TV cope with Amazon.
Can the Video games Workshop worth hold flying, although? In different phrases, is its large development potential now baked into its excessive valuation?
The corporate’s worth increase means it now trades on a ahead price-to-earnings (P/E) ratio of 29.2 occasions. 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 that may dent its momentum. Gross sales are hovering, however new US commerce tariffs may considerably compromise future development (the enterprise manufactures 100% of its product in Nottingham, England).
The enterprise has additionally, in latest occasions, 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 offered to our deliberate ranges“.
A monster share to contemplate
No share is with out danger, nevertheless. And on steadiness, I believe 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 at present constructing a mighty Soulblight Gravelords military, in case you’re questioning). So I wish 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 stated in October it was on target to beat half-year forecasts for 2025, too, which it duly did.
Right now’s replace retains the run going. I don’t assume the story’s over, both, given the robust, broad-based momentum the enterprise is having fun with, and the doubtless huge 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 the moment’s market replace. They usually say that “the shares have carried out properly, however there continues to be clear momentum“. I anticipate additional important appreciation within the months and years forward. At present, I’m glad holding the shares I’ve as a part of a diversified portfolio.
