Keywords Studios PLC (AIM:KWS, OTC:KYYWF) is poised for yet another year of outperformance thanks in-part to its artificial intelligence strategy, analysts have said.
Following the video game industry services firm’s results last week, Stifel analysts hailed another year of consecutive growth against the wider market since 2018.
“To us, this is a clear sign that widening its service remit, investing in technology and taking a more strategic approach to working with clients, is enabling it to widen its moat,” the bank said in a note.
Organic growth should come in at 8.5%, analysts added, with Keywords once again taking market share.
Keywords had reported annual revenue growth for the year to December of 13% to €780.4 million, compared to €690.7 million in 2022.
Stifel pointed out that around half of Keywords’ sales were now from faster-growing areas, such as game development, marketing services, the live operations ecosystem and AI.
On AI, Stifel added Keywords had been investing in such tools “in advance of the epiphany in financial markets a year ago”, which so far have proved “a helpful productivity tool”.
Though likely second-half weighted, the bank said “we see scope for rating expansion given continued solid growth and as the group moves forward the narrative on AI”.
Revenue and pre-tax earnings forecasts were hiked by 2% and 4% to €895.7 million and €84.4 million respectively as a result, while a ‘buy’ rating and a share price target of 1,800p were kept.
The shares were down 0.6% at 1,417p on Monday.