CD Projekt: Looking Back, Phantom Liberty Outperformed

2025-03-31 03:40:35 ET

Summary

• CD Projekt's Phantom Liberty DLC exceeded our sales expectations, solidifying the Cyberpunk 2077 IP's strength and showing single-player games' market relevance.
• Future success hinges on Witcher 4 and Cyberpunk Orion, with Witcher 4 projected to account for 17% of CDPR's current EV and market cap in discounted value.
• CDPR is currently in a low run-rate state, which does mean it may take until Witcher 4 release to see the valuation gap close, with Orion following after.

CD Projekt (OTGLF) is a stock we've not covered in quite some time. What we find, first of all, is that we were very good at estimating the sales of Phantom Liberty. At 8 million copies, this tracks above the 1 billion PLN sales forecast we had for the game, based on the Witcher 3's Blood and Wine DLC as a comp and based on the $35 price tag for the DLC. Our forecast implied something around 7.2 million sales, and we also had assumed that the sales of Blood and Wine were around 30% of the sales of the Witcher 3 and that Cyberpunk would see something similar with Phantom Liberty - we were close with 8 million to 30 million....

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