CD Projekt (OTGLY) AI Stock Analysis

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CD Projekt

(OTC:OTGLY)

79Outperform

CD Projekt's strong financial health, marked by robust profit margins and debt-free balance sheet, is a major strength. Technical indicators suggest stable upward momentum, though valuation concerns could deter some investors. The earnings call underlined strategic growth initiatives despite revenue challenges, supporting a positive but cautious outlook.

CD Projekt (OTGLY) vs. S&P 500 (SPY)

Market Cap

$5.12B

Dividend Yield0.29%

Average Volume (3M)1.63K

Price to Earnings (P/E)43.6

Beta (1Y)1.21

Revenue Growth9.24%

EPS Growth10.39%

CountryUS

Employees634

SectorCommunication Services

Sector Strength98

IndustryElectronic Gaming & Multimedia

Share Statistics

EPS (TTM)0.29

Shares Outstanding399,642,030

10 Day Avg. Volume4,167

30 Day Avg. Volume1,634

Financial Highlights & Ratios

PEG Ratio53.01

Price to Book (P/B)N/A

Price to Sales (P/S)11.57

Price to Cash Flow (P/CF)N/A

P/FCF Ratio0.00

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price TargetN/A

Price Target UpsideN/A

Rating ConsensusN/A

Number of Analyst Covering0

CD Projekt Business Overview & Revenue Model

Company DescriptionCD Projekt (OTGLY) is a renowned video game developer and publisher based in Poland, best known for its critically acclaimed 'The Witcher' series and the open-world role-playing game 'Cyberpunk 2077'. The company operates primarily in the video game industry, offering high-quality, story-driven games that are developed by its in-house studio, CD Projekt Red. In addition to game development, CD Projekt also owns GOG.com, a digital distribution platform for PC games and films, emphasizing DRM-free content.

How the Company Makes MoneyCD Projekt generates revenue primarily through the sale of video games developed by its studio, CD Projekt Red. This includes both initial sales of new game releases and ongoing sales of existing titles. The company benefits from digital distribution channels, including GOG.com, which allows it to reach a global audience while retaining a larger share of sales revenue compared to traditional retail distribution. CD Projekt also earns money through the sale of game-related merchandise and licensing deals. Additionally, the company occasionally partners with other entities for co-development or distribution, which can contribute to its earnings.

CD Projekt Financial Statement Overview

Summary

CD Projekt maintains strong profitability and an impressive balance sheet free of debt, with high gross and net profit margins. Despite a revenue decline of 9.4%, efficient cash flow management and solid financial reserves underscore resilience.

Income Statement

Very Positive

CD Projekt shows strong profitability with a TTM gross profit margin of 71.5% and a net profit margin of 39.4%. The revenue growth rate, however, shows a decline of 9.4% from the previous year, indicating some challenges in maintaining revenue growth. Despite this, the company maintains robust margins, with an EBIT margin of 36.7% and an EBITDA margin of 55.7%.

Balance Sheet

Very Positive

CD Projekt's balance sheet is robust with a debt-to-equity ratio of 0.0, indicating no reliance on debt. The equity ratio stands at a strong 93.3%, showcasing financial stability. However, a slight decrease in stockholders' equity from the previous year may warrant monitoring.

Cash Flow

Very Positive

The company's cash flow is impressive, with a free cash flow growth rate of 55.8% and an operating cash flow to net income ratio of 1.67. The free cash flow to net income ratio of 0.99 indicates efficient cash flow management, though a slight dip in operating cash flow growth could be a potential concern.

TTM	Dec 2023	Dec 2022	Dec 2021	Dec 2020	Dec 2019
Breakdown
Income Statement		Total Revenue
1.11B	1.23B	952.58M	888.17M	2.14B	521.27M
	Gross Profit
797.31M	849.63M	708.60M	637.94M	1.65B	359.96M
	EBIT
408.72M	469.04M	377.35M	232.90M	1.16B	180.29M
	EBITDA
620.75M	553.33M	408.36M	326.63M	1.43B	227.24M
	Net Income Common Stockholders
439.24M	481.11M	347.09M	208.91M	1.15B	175.31M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
878.98M	878.98M	894.67M	984.35M	834.15M	482.30M
	Total Assets
2.61B	2.61B	2.27B	2.16B	2.89B	1.40B
	Total Debt
20.04M	20.04M	28.46M	46.88M	18.94M	19.91M
	Net Debt
-158.02M	-158.02M	-249.37M	-364.70M	-544.40M	-29.50M
	Total Liabilities
209.95M	209.95M	240.72M	264.38M	707.12M	298.46M
	Stockholders Equity
2.40B	2.40B	2.03B	1.89B	2.19B	1.11B
Cash Flow		Free Cash Flow
436.32M	280.07M	149.93M	784.46M	490.12M	-39.79M
	Operating Cash Flow
734.29M	610.88M	406.03M	967.83M	711.71M	216.71M
	Investing Cash Flow
-798.85M	-607.35M	-335.61M	-613.79M	-106.39M	-164.50M
	Financing Cash Flow
-103.78M	-103.31M	-204.18M	-505.78M	-91.39M	-107.18M

CD Projekt Technical Analysis

Technical Analysis Sentiment

Positive

Last Price12.88

Price Trends

50DMA

13.86

Positive

100DMA

12.65

Positive

200DMA

11.54

Positive

Market Momentum

MACD

0.08

Positive

RSI

46.33

Neutral

STOCH

16.21

Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For OTGLY, the sentiment is Positive. The current price of 12.88 is below the 20-day moving average (MA) of 13.92, below the 50-day MA of 13.86, and above the 200-day MA of 11.54, indicating a neutral trend. The MACD of 0.08 indicates Positive momentum. The RSI at 46.33 is Neutral, neither overbought nor oversold. The STOCH value of 16.21 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for OTGLY.

CD Projekt Peers Comparison

Overall Rating

UnderperformOutperform

Sector (58)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TCEHY	82 Outperform	$515.90B	19.55	21.80%	0.68%	6.71%	69.43%
OTGLY	79 Outperform	$5.12B	43.62	18.23%	0.29%	9.24%	10.39%
NTDOY	76 Outperform	$74.53B	38.68	12.13%	1.00%	-32.32%	-40.19%
EA	74 Outperform	$35.60B	34.75	14.04%	0.56%	-2.99%	-0.46%
TTWO	62 Neutral	$36.73B	―	-51.45%	―	1.00%	-148.89%
Sector *	58 Neutral	$26.94B	3.15	-10.67%	4.32%	2.14%	-43.11%

* Communication Services Sector Average

Performance Comparison

OTGLY

CD Projekt

13.91

6.59

90.03%

Electronic Arts

139.39

12.18

9.57%

TTWO

Take-Two

204.41

57.14

38.80%

NTDOY

Nintendo Co

18.16

5.79

46.81%

TCEHY

Tencent Holdings

57.30

18.10

46.17%

CD Projekt Earnings Call Summary

Earnings Call Date: Mar 25, 2025 | % Change Since: -11.11% | Next Earnings Date: May 28, 2025

Earnings Call Sentiment Neutral

The earnings call presented a mix of positive developments in game sales and financial management, but also highlighted challenges in maintaining revenue growth without new releases. Despite a decrease in sales revenue, the company showed resilience with increased net profit and profitability. The overall focus on future projects and expansions to new platforms suggests optimism for upcoming quarters.

Highlights

Cyberpunk 2077 Sales Milestone

Cyberpunk 2077 has reached over 30 million copies sold, demonstrating strong ongoing demand and community interest in the franchise.

Phantom Liberty Expansion Success

The Cyberpunk 2077 expansion, Phantom Liberty, sold over 8 million copies, highlighting the quality and enduring appeal of the franchise.

Mac Platform Expansion

Cyberpunk 2077 Ultimate Edition will be released natively on Macs with Apple silicon, expanding the game's availability to more platforms.

Witcher Franchise Development

Project Polaris reached a key milestone by completing preproduction, with the project now moving to the production phase.

Net Profit Increase

Net profit for Q3 2024 was PLN 78 million, which is 12% more than in Q2 2024.

Efficiency Maintained

Net profitability reached 38%, slightly higher than the previous year, indicating efficient business operations despite challenges.

Financial Reserves Growth

CD Projekt's financial reserves increased by PLN 36 million, reaching PLN 1.4 billion by the end of September 2024.

Lowlights

Revenue Decline

Q3 2024 sales revenues were nearly PLN 228 million, approximately half of the revenues from the same period in the previous year, primarily due to the lack of new launches.

Increased Administrative Expenses

Administrative expenses increased due to early phase work on new projects, reaching over PLN 22 million.

Research Costs Impact

Research activities burdened the income statement by PLN 61 million more than in the comparative period.

Company Guidance

During the Q3 2024 earnings call for CD Projekt Group, key performance metrics and guidance were highlighted, reflecting both ongoing successes and strategic plans. Cyberpunk 2077 sales surpassed 30 million copies, while the Phantom Liberty expansion achieved 8 million sales. Financially, the group's sales revenue reached nearly PLN 228 million, with a net profit of PLN 78 million for the quarter. Despite the absence of new launches, the Witcher franchise saw a 44% revenue increase year-over-year. The company is optimizing operations, as seen by the reduction in development team size from 410 to 400, while maintaining a focus on Project Polaris. Furthermore, strategic investments in research and development totaled PLN 68.5 million, underscoring CD Projekt's commitment to future projects, such as Orion and collaborations like the new Cyberpunk animation with Netflix. Looking ahead, the company anticipates continued growth, supported by strategic initiatives and the upcoming Cyberpunk 2077 ultimate edition for Apple silicon devices.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.