The Witcher 4 / CD Projekt RED
CD Projekt Red has become the most expensive company in the European Stoxx 600 — all because of the hype around The Witcher 4, which is still at least two years away from release.
The Polish studio CD Projekt has outperformed even the giants in the field of artificial intelligence. Today, the company’s shares are traded at a price-to-earnings ratio of 29 times, the highest among companies in the Stoxx 600 index. The studio outperforms even Ubisoft and Take-Two in terms of market capitalization, even though they own such franchises as Assassin’s Creed or GTA.
The reason is very simple: the upcoming release of The Witcher 4, from which investors expect the biggest profit ever. Analysts predict a more than threefold increase in sales in 2027 if the game’s release is not postponed.
Interestingly, this happened before the release of Cyberpunk 2077 five years ago: CD Projekt Red shares soared, but fell after the problematic release. This time, the situation is a bit more cautious — analysts consider the company’s shares to be overvalued by 21% of the market price, and some are already advising to sell them. If the Polish studio decides not to repeat Cyberpunk’s mistakes, the risk of a stock drop will decrease.
Undoubtedly, for many, CDPR remains the top studio in the Polish gaming sector. Investors value the company not only for the popularity of the franchise but also for regular support of old games: new content for Cyberpunk 2077 and Witcher 3 update are still being published. In addition, Cyberpunk sequel to come and a number of other projects, including unannounced ones.
At the same time, in June, the Polish studio showed a 17-minute technical demonstration with Ciri and new graphics technologies based on the Unreal Engine, which analysts praised very highly. It was this demonstration that added fuel to the fire of investor excitement.
Among other details that increased investors’ interest in CD Projekt Red:
CD Projekt’s Co-CEO Michal Nowakowski said that the company aims transparently to inform the market and simultaneously fuel interest in the release. In general, the fact that the company’s shares were highly appreciated by investors is a classic — for CDPR, this is a familiar story. Now the main thing is that the new The Witcher does not repeat the fate of Cyberpunk 2077.
Source: Bloomberg