This brilliant UK stock has risen from £99 per share at the turn of the year to around £143 today. I believe it could be one of the FTSE 100‘s best performing stocks in 2025 as well.
Here’s why.
Fantasy hero
Games Workshop (LSE:GAW) shares haven’t hit the Footsie just yet. But they will get a seat among the big boys just before Christmas, on 23 December.
Other upcoming promotions from the FTSE 250 are Alliance Witan and St James’ Place.
Since the start of 2024, Games Workshop’s share price has surged a whopping 45%. It now has a market cap of £4.7bn, which — on the face of it — is remarkable, considering the niche products that it specialises in.
Beloved products
In a nutshell, the business designs, manufactures, distributes, and sells miniature plastic models in kit form. Individuals choose from a wide range of figures that they build and paint, and then put into battle in tabletop wargaming scenarios.
This isn’t one of your everyday industries, then. But make no mistake: this is a fast-growing global phenomenon, and Games Workshop has positioned it at the forefront with market-leading franchises like Warhammer 40,000.
Collecting and building Warhammer miniatures is highly addictive, and has led to Games Workshop’s products being playfully referred to as ‘plastic crack.’ This allows sales to remain broadly stable even during downturns. It also means the company enjoys stunning profit margins (core gross margins were 69.4% in the last financial year).
Price drivers?
But what could lead Games Workshop’s shares even higher in 2025?
One potential driver could be further strong product launches. New releases have sold like proverbial hot cakes in recent quarters, with pre-orders (especially on Warhammer 40,000 products) selling out within minutes on Games Workshop’s own website, alongside those of third-party retailers.
Another could be rapid sales increases as the company grows its global store estate and improves its online shop. Soaring interest for fantasy gaming means it now has 548 stores, up from around 420 a decade ago.
Games Workshop could also see a further sharp rise in licencing revenue, which rose 22% in the last financial year. The firm is looking to increasingly licence its intellectual property to media and entertainment companies, and is in talks with Amazon to produce television and film content based on Warhammer 40,000.
A top buy
It’s important to note that Games Workshop’s shares carry a meaty premium at current prices. A price-to-earnings (P/E) ratio of 29.1 times is way above the FTSE 100 average of 14.3.
This may not only limit further price gains in the new year. It could even prompt a price reversal if profits come under unexpected pressure, such as from rising costs or increasing competitive threats.
But on balance, I’m still expecting the company to be one of the Footsie’s best peformers in 2025.
I already own Games Workshop shares in my Self-Invested Personal Pension (SIPP). And I’m planning on buying more as soon as I next have spare cash to invest.
