Although CD Projekt is still trading below its 2020 peaks, its shares have been on a strong rise this year. Investors are currently optimistic about the Polish company, but have concerns about its ambitious game pipeline.
The Witcher 3
CD Projekt shares have already risen more than 63% since the beginning of 2024, currently trading at PLN 182.85 ($47.47) per share. This is the highest price since April 2021, but it is still well below the all-time high of PLN 446 ($115.7) in August 2020.
According to Bloomberg, The Witcher developer’s stock has been the best performer among all companies in the WIG20 Index this year.
The publication noted that most analysts failed to predict such positive dynamics, with only 3 out of 12 reccomending to buy the shares as of January 1, 2024.
However, some market experts expect CD Projekt shares to fall 30% over the next 12 months. The main worrying sign is the company’s game development pipeline. “This is an unbelievable task that they’re taking on,” Cantor Fitzgerald analyst Edward James told Bloomberg. “There’s a lot of room for error, and there’s significant room for volatility in estimates.”
CD Projekt currently has four projects in various stages of development:
- Project Polaris — the next major installment in The Witcher franchise built with Unreal Engine 5. As of April 30, 407 people were working on the game, with the company now telling Bloomberg that it will enter the production stage in H2 2024;
- Project Orion — a new game based on the Cyberpunk 2077 IP, with its team including over 50 developers. CD Projekt continues to hire new talent for its Boston-based studio;
- Project Sirius — a Witcher spin-off developed by CD Projekt’s subsidiary The Molassess Flood. The game was rebooted last year, with the company writing off around $10 million in expenses to reevaluate the project’s scope and concept;
- Project Hadar — a brand new IP, which is still in the early concept stage. Its team currently includes about 20 people.
In addition, CD Projekt’s pipeline includes a remake of the first Witcher game (also in the concept stage). It is being developed by third-party studio Fool’s Theory, which consists of several CDPR veterans.
Most of these projects may cause financial challenges. While analysts see The Witcher as the less-risky franchise, they still don’t expect it to boost the company’s sales until 2026.
This means CD Projekt has to rely on its back catalog sales. Last year, it successfully launched the Phantom Liberty expansion for Cyberpunk 2077, bringing the franchise’s total lifetime revenue to over PLN 3 billion (over $750 million). The Witcher series also continues to perform strong, especially during various sales events, but it is unclear whether both IPs will be able to fuel CD Projekt’s growth before the release of the next major projects.