Last month, one bone-crushing growth stock took a hammer to the FTSE 100. It flattened all comers, ending November up a mighty 25.96%. The name of this behemoth? Miniature war games manufacturer Games Workshop Group (LSE: GAW). It smashed its way out of the FTSE 250 last December, and is more than holding its own in the blue-chip index.
Ten years ago, Games Workshop shares traded at just over 600p. Today they cost 19,320p. That’s a 3,104% increase, enough to turn a £10,000 investment into £320,400. Long-term investors who reinvested dividends would have done even better. But that’s history now. The key question is this: can its epic performance continue?
Stunning long-term performance
Games Workshop designs and manufactures model soldiers, game systems and accessories for tabletop wargaming. Its stores sit in 134 unassuming locations, yet they’re always busy when I pass. This isn’t just a British obsession. The company has 185 stores in North America, 162 in Continental Europe, 49 in Australia and 18 in Asia. It’s conquering the world.
On 12 November, broker Jefferies lifted its price target almost 55% to 18,300p and reiterated its Buy rating. It flagged a “major opportunity” despite expecting a dip in profits across full-year 2026, by anticipating double-digit growth in 2027. Jefferies praised Warhammer’s mass-market potential and its upcoming streaming tie-in with Amazon.
Revenue update
Eight days later, Games Workshop revealed that core revenues for the six months to 30 November will rise at least 15% year on year to £310m. Licensing revenue will drop from £30m to around £16m, but pre-tax profits are expected to climb at least 6.5% to £135m. Interim results land on 13 January.
The shares have spiked and expectations have soared, leaving the company with a bumper price-to-earnings ratio of 35.5. Investors who buy today risk getting hit by a bout of profit taking or disappointment if the interims land awkwardly.
Investors need a different mindset than in times of yore. Games Workshop is no longer a small upstart but a £6.4bn biggie. It’s unlikely to grow another 3,000%, that would lift its market cap to £202bn, almost as big as drugs giant AstraZeneca at £217bn today. Its fan base is loyal but also niche. Miniature war games will never be everybody’s bag.
Analyst Outlook
Consensus one-year share price forecasts suggest a target of 18,670p, slightly below today’s price (and no doubt compiled before the recent spike). Games Workshop has already exceeded Jefferies’ upgraded target.
Buying shares is always personal, and I tend to focus on undervalued companies with recovery potential, rather than whizzy momentum plays like this one. But I’ll admit it, I’ve lost out on an awful lot of excitement as a result. Including here.
I think I may be late to the Games Workshop party, but I think I wrote that three or four years ago, so I’m not the best judge. I think growth-focused investors might well consider buying in the weeks ahead, while keeping an eye on the Amazon tie-in. If it delivers, it could put a rocket under the stock. If it flops, it could tarnish the brand. Personally, I’ll be heading to the FTSE 250, searching for the next growth story at a better price.
