CD Projekt is this decade's best gaming investment but will the stock continue to outperform. It all rests with the Cyberpunk 2077 release.
CD Projekt SA (WSE: CDR) has easily been this decade’s best gaming investment. For the last ten years, the Polish game developer and publisher has flown largely under the radar with its highly-acclaimed Witcher games.
The company was arguably the first to bring Andrzej Sapkowski’s stories into the mainstream. And now as The Witcher finds universal acclaim, the Polish powerhouse is hoping its knack for spotting hidden gems will continue.
According to Bloomberg, CD Projekt SA has outperformed every other stock in the European Stoxx 600 index by a long margin. In fact, at a valuation of nearly $7 billion, the company returned a whopping 21,000% to its early investors.
That’s all the more remarkable when you consider it is about to overtake Ubisoft, a gaming business that had a head start of approximately 15 years.
Maintaining that upward trajectory will be no easy feat, though. Unlike gaming behemoths Activision Blizzard and Electronic Arts, CD Projekt Red (the gaming arm) prefers to put all its eggs in one basket. Or in Cyberpunk 2077’s case, perhaps one egg in one basket.
Everything rests on next year’s April 16th release. But the company is no stranger to pressure, even in the face of bankruptcy. The most striking example is their epic fight to keep the rights of The Witcher games.
Now they’re in a much better position financially but the risks to success are still the same. On the back of the hype analysts are betting on a record revenue increase for 2020.
At $845 million, that’s a four-fold increase from the previous record in 2015. Investor profit demands are a new kind of pressure but no less relevant.
The good news for those looking to invest in the European outfit is that their gamer-centric reputation remains intact. It’s no surprise that CD Project Red is gaming’s good guy and probably deserves all your cash.
Gaming is a global phenomenon and the company is competing with the big boys exactly the way it should – by putting its worldwide community first.
As the game enters its final stages of development, it’s sparing no cost. It plowed more than $10 million into the title in the third quarter of 2019 alone.
Now as it most likely catapults above Ubisoft, its next target is Electronic Arts with a lofty $30 billion valuation. And that’s a juicy prospect when you consider EA’s awful reputation.
Will Cyberpunk 2077 Extend CD Projekt’s Massive Stock Market Gains? The answer is almost certainly a yes. But you’ll still have to wait
almost four months a lifetime to find out.
Last modified: September 23, 2020 1:25 PM