Stock Analysis

The 22% return this week takes CI Games' (WSE:CIG) shareholders three-year gains to 169%

  •  Updated
WSE:CIG
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It might seem bad, but the worst that can happen when you buy a stock (without leverage) is that its share price goes to zero. But in contrast you can make much more than 100% if the company does well. For example, the CI Games S.A. (WSE:CIG) share price has soared 169% in the last three years. How nice for those who held the stock! It's also good to see the share price up 41% over the last quarter. This could be related to the recent financial results, released recently - you can catch up on the most recent data by reading our company report.

Since the stock has added zł86m to its market cap in the past week alone, let's see if underlying performance has been driving long-term returns.

However if you'd rather see where the opportunities and risks are within CIG's industry, you can check out our analysis on the PL Entertainment industry.

In his essay The Superinvestors of Graham-and-Doddsville Warren Buffett described how share prices do not always rationally reflect the value of a business. One imperfect but simple way to consider how the market perception of a company has shifted is to compare the change in the earnings per share (EPS) with the share price movement.

During three years of share price growth, CI Games moved from a loss to profitability. That kind of transition can be an inflection point that justifies a strong share price gain, just as we have seen here.

The company's earnings per share (over time) is depicted in the image below (click to see the exact numbers).

earnings-per-share-growth
WSE:CIG Earnings Per Share Growth September 27th 2022

It is of course excellent to see how CI Games has grown profits over the years, but the future is more important for shareholders. If you are thinking of buying or selling CI Games stock, you should check out this FREE detailed report on its balance sheet.

A Different Perspective

It's good to see that CI Games has rewarded shareholders with a total shareholder return of 76% in the last twelve months. Since the one-year TSR is better than the five-year TSR (the latter coming in at 18% per year), it would seem that the stock's performance has improved in recent times. Given the share price momentum remains strong, it might be worth taking a closer look at the stock, lest you miss an opportunity. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. To that end, you should learn about the 2 warning signs we've spotted with CI Games (including 1 which is significant) .

But note: CI Games may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on PL exchanges.

Valuation is complex, but we're helping make it simple.

Find out whether CI Games is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

View the Free Analysis

About WSE:CIG

CI Games

CI Games S.A. produces, publishes, and distributes video games in Europe, North and South America, Asia, and Africa.

The Snowflake is a visual investment summary with the score of each axis being calculated by 6 checks in 5 areas.

Analysis AreaScore (0-6)
Valuation2
Future Growth5
Past Performance1
Financial Health5
Dividends0

Read more about these checks in the individual report sections or in our analysis model.

High growth potential with excellent balance sheet.