When it comes to UK growth stocks, few have come close to replicating Games Workshop‘s (LSE:GAW) track record. The niche miniature manufacturer is the mastermind behind the Warhammer universes. And with the hobby evolving into a global phenomenon spanning video games, films, TV series, and books alongside the core tabletop gaming experience, the business has grown into a FTSE 100 multi-billion-pound enterprise.
To put this extreme level of success into perspective, over the last 25 years, the stock’s climbed from a share price of £1.15 to £142.30 today. And when including dividends into the mix, that translates into a total return of 41,091%!
That means anyone who put £10,000 to work in October 2000 now has over £4.1m! The question now becomes, could Games Workshop do it again?
Growth potential in 2025
For Games Workshop to deliver another 411x return, the group’s market-cap would need to reach just over £1.9trn. Sadly, that’s not a realistic assumption. However, even with its larger scale today, the business still offers significant growth potential.
The Warhammer hobby has never been more popular. With management focusing on expanding its digital presence through streaming and video games, the brand’s extending beyond the niche world of hobby wargaming. It’s attracting a much broader audience, a slice of which are seduced into the collecting and tabletop gaming hobby, where the business makes the bulk of its profits.
As such, in the last 12 months, the growth stock has jumped a further 35% – more than double that of the FTSE 100 on the back of record-breaking results.
With new digital projects in the pipeline, alongside the suspected launch of Warhammer 40,000 11th Edition in 2026, more impressive growth could be just around the corner. And overall, the consensus among institutional investors is bullish, with an average share price target of £165 by this time next year.
What could go wrong?
As previously mentioned, management’s strategy is to access a wider audience through digital content licensing. A lot of excitement’s building up surrounding its project with Amazon to develop a fully fleshed-out streaming series starring Henry Cavill.
However, this introduces some critical execution risk. For many people, the show could be a first-time introduction to the Warhammer universe. And if it turns into a flop, the strategy could backfire, harming the brand instead of bolstering it.
There’s also the more immediate threat of US tariffs. Even though North America’s a key market, Games Workshop manufactures all of its miniatures in Nottingham and has warned of a £10m-£12m profit headwind as a result of the shifting trade policy.
Pairing this with another expected slowdown in licensing earnings compared to a year ago, the group’s premium valuation could be tested.
The bottom line
As a millionaire-making growth stock, Games Workshop has bolstered the wealth of many British investors who spotted its potential early. And looking ahead, I remain cautiously optimistic that the business will continue to do so over the long run.
The near-term challenges and tough comparables in licensing might trigger short-term volatility. But should that happen, I’ll certainly be considering increasing my existing position.
