Davy upgrades Dublin-based Keywords Studios to ‘outperform’

Upgrade comes despite Keywords recently predicting below-consensus full-year revenue

Davy has upgraded its forecast for the Irish-listed video-gaming company Keywords Studios, saying it believes the move to cloud gaming will drive further outsourcing opportunities for the Sandyford-headquartered group.

The stockbroker on Tuesday upgraded Keywords to “outperform” from “neutral”, with a revised price target of 1400p.

“We continue to believe in the outsourcing opportunity for KWS within the $150 billion-plus video game industry. KWS’s sales are growing above the industry average, further testament to developers’ increasing move to outsourcing partners,” it said.

“Within this we believe KWS’s increased engineering exposure will benefit in 2019 and 2020, driven by the move to cloud gaming. Additionally, cloud gaming is likely to drive many divisions within KWS over the longer term as further outsourcing disrupts the traditional video game business model.”


The upgrade comes shortly after Keywords said it expected full-year profits for 2018 to be about €37 million on revenues of €250 million. This is at the bottom of consensus forecasts, and 8 per cent below Davy’s projection of €40.4 million in profits before taxes.

Market value

Keywords, which is listed on London's AIM market, has a market value of more than €1 billion. It provides services to 23 of the top 25 most prominent games companies globally, including Tencent, Electronic Arts, Oculus, Supercell, Activision, Microsoft, Sega, Nintendo and Ubisoft.

The group has grown from being a small studio employing 50 at a single site in Dublin to one that now has up to 5,000 people working across more than 40 locations in 20 countries. It has also shifted from being a single-service business to one with lines covering integrated art production, engineering, audio services, testing, localisation and player support services across 50 languages and multiple game platforms.

Charlie Taylor

Charlie Taylor

Charlie Taylor is a former Irish Times business journalist