CD Projekt sets sail for a new long-term strategy
CD Projekt is one of the leading European gaming developers and has risen 46% since early September despite first-half year result disappointed against estimates but delivered net income growth of 8% y/y. The gaming developer said it would deliver a long-term strategy vision for the company and this new vision came yesterday. It includes working on two AAA gaming projects which are Witcher and a new title. In addition, the deputy CEO is stepping down and joining the supervisory board instead and a new share buyback programme of PLN 100mn has been initiated. The company also says that it will add multiplayer elements to its video gaming pipeline, which has a lot of potential due to higher engagement in multiplayer, and the gaming developer has said that it will not sell new shares to finance the new gaming projects.
The market has been betting on good news from CD Projekt and with the stock price up 5% today extending on yesterday’s move it seems investors are buying into the long-term strategy. The past 18 months have been tough for the company as revenue has declined from PLN 2.1bn in 2020 to just PLN 796mn in the past 12 months. The equity valuation, measured on 12-month forward EV/EBITDA, is still 150% above the MSCI World Index suggesting high expectations for growth in the future.