Games Workshop (GAW) shares are on a meteoric rise that shows no signs of easing.
Up 140% in the last five years, the tabletop gaming giant breached the gates of the FTSE 100 last December. And it’s got 2025 off to a bang, up almost 9% in the year to date.
Games Workshop’s share price received an additional boost on Wednesday (5 March) after yet another strong trading update. It said that “trading in January and February has been ahead of expectations, with strong trading across both the core business and licensing“.
Consequently, it said pre-tax profit for the financial year to June 2025 “is estimated to be ahead of expectations“. This pushed its share price around 6% higher in mid-week business.
Overvalued?
Best known for its Warhammer gaming system, Games Workshop sets the standard in the rapidly growing world of fantasy war gaming. Its share price has rocketed, as sales of its miniatures have soared along with royalty revenues.
Core gaming sales rose 14.3% in the first half of the year. Licencing revenues from video games and other media, meanwhile, leapt 149%.
I’m confident of further stratospheric royalties growth, too, under Games Workshop’s recently signed film and TV deal with Amazon.
Can the Games Workshop price keep flying, though? In other words, is its huge growth potential now baked into its high valuation?
The company’s price boom means it now trades on a forward price-to-earnings (P/E) ratio of 29.2 times. This is more than double the FTSE 100’s forward average, and well above a multiple of around 22 a year ago.
And while the company’s flying, it still faces significant hazards that might dent its momentum. Sales are soaring, but new US trade tariffs could significantly compromise future growth (the business manufactures 100% of its product in Nottingham, England).
The business has also, in recent times, struggled to meet the pace of demand for its products. It warned in January that “we are still not meeting our stock availability KPIs and not all of our new product releases sold to our planned levels“.
A monster share to consider
No share is without risk, however. And on balance, I think Games Workshop’s share price should keep on surging.
As well as being a shareholder myself, I’m a huge fan of the company’s products (I’m currently building a mighty Soulblight Gravelords army, in case you’re wondering). So I like to think I know what I’m talking about!
Games Workshop has made topping forecasts a welcome habit. Fresh from beating brokers’ profit estimates for the last financial year, the company said in October it was on course to beat half-year forecasts for 2025, too, which it duly did.
Today’s update keeps the run going. I don’t think the story’s over, either, given the strong, broad-based momentum the business is enjoying, and the potentially massive contribution of the Amazon deal.
Analysts at Peel Hunt have hiked their Games Workshop price target to £15 per share from £14.40 following today’s market update. And they say that “the shares have performed well, but there continues to be clear momentum“. I expect further significant appreciation in the months and years ahead. Currently, I’m happy holding the shares I have as part of a diversified portfolio.
