Have shares in Keywords Studios shot up too far?

All the good news about forthcoming results is already in the market
Thursday 14 Sep 2017 Author: Daniel Coatsworth

Tuesday 19 September

Shares in video game services provider Keyword Studios (KWS:AIM) have shot up by more than 50% since telling the market in July that half year results would be very good.

Given the extent of this rally and that Keywords has already given the market revenue and profit figures, we believe there is a risk the shares could fall when interim results are published on 19 September as investors cash in some profit.

We’ve seen this happen on many occasions over the years. Investors buy on positive trading updates and cash in their gains once the figures are confirmed on results day.

Analysts have already upgraded earnings forecasts for Keywords off the back of the July update, so it is hard to see them doing this again next week. We believe the shares will only sustain upwards momentum if Keywords can provide an exceptionally positive outlook statement at the results.

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