NEXON Co (3659) AI Stock Analysis

• Market Cap: $2.30T
• Dividend Yield: 1.05%
• Average Volume (3M): 2.30M
• Price to Earnings (P/E): 19.0
• Beta (1Y): 1.01
• Revenue Growth: 10.80%
• EPS Growth: 138.34%
• Country: JP
• Employees: 9,329
• Sector: Communication Services
• Sector Strength: 92
• Industry: Electronic Gaming & Multimedia
• EPS (TTM): 32.12
• Shares Outstanding: 823,245,600
• 10 Day Avg. Volume: 2,205,560
• 30 Day Avg. Volume: 2,297,933
• PEG Ratio: -2.35
• Price to Book (P/B): 3.02
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 20.85
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $2,501.80
• Price Target Upside: -12.62% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 6

• Rating: 80 Outperform
• Price Target: ¥3,282.00 ▲(14.63%Upside)

NEXON Co scores highly due to its robust financial performance, with strong revenue growth and excellent cash flow management. The technical indicators suggest bullish momentum, although caution is warranted due to overbought signals. Valuation is fair, and the earnings call highlighted growth opportunities, despite some challenges. Overall, the company is well-positioned for future growth, with a need to monitor potential cost pressures and market conditions.

Positive Factors

Capital Return

A 7% capital return yield, bolstered by significant buybacks and dividends, makes a negative outlook on Nexon shares risky.

Financial Performance

Nexon’s strong first quarter results, with operating profit of ¥41.6 billion, surpassed expectations and demonstrate robust financial performance.

Strategic Acquisition

Reports of Tencent's interest in acquiring Nexon support a positive strategic outlook and valuation for the company.

Negative Factors

Investor Confidence

Weak interactions with domestic investors have reduced confidence in Nexon's potential as a top investment pick.

Leadership Changes

The departure of prior CEO Owen Mahoney has led to a language barrier and increased uncertainty among domestic investors.

Profit Center Decline

Nexon is experiencing declines in its major profit centers, such as DNF in China, which impacts its financial stability.

NEXON Co Business Overview & Revenue Model

Company Description

NEXON Co., Ltd. produces, develops, and services PC online and mobile games. It operates through five segments: Japan, Korea, China, North America, and Others. The company's PC online game titles include MapleStory, Dungeon & Fighter, and EA SPORTS FIFA ONLINE 4. It offers approximately 60 online games in 190 countries. The company was formerly known as NEXON Japan Co., Ltd. and changed its name to NEXON Co., Ltd. in April 2009. The company was founded in 1994 and is headquartered in Tokyo, Japan.

How the Company Makes Money

NEXON Co. generates revenue primarily through a free-to-play model with microtransactions, where games are free to download and play, but players can purchase in-game items, enhancements, and virtual currency to enhance their gaming experience. This model allows NEXON to capitalize on a broad user base by offering premium content and services. Additionally, the company earns revenue through partnerships and collaborations with other gaming companies, as well as licensing agreements that allow third parties to develop or distribute its games. NEXON also benefits from its strategic investments in other gaming-related companies, further diversifying its revenue streams.

NEXON Co Financial Statement Overview

Summary

NEXON Co displays strong financial performance with solid revenue growth and profitability, efficient cost management, and robust cash flow generation. The balance sheet is stable with low leverage and a strong equity base, though slight cost pressures and declining ROE warrant monitoring.

Income Statement

NEXON Co has demonstrated strong profitability with a consistent gross profit margin averaging around 63% over the recent periods. The net profit margin in the TTM is robust at approximately 27.7%, reflecting efficient cost management and profitability. Revenue growth has been steady, with a notable increase of 6.7% from 2023 to 2024 and a further increase in the TTM. While the EBIT margin is strong at 30.4%, there is a slight decrease from previous years, indicating potential cost pressures. Overall, the income statement reflects a healthy financial performance with solid growth and profitability metrics.

Balance Sheet

The balance sheet of NEXON Co shows a healthy equity position with an equity ratio of approximately 81.2% in the TTM, indicating a solid financial structure. The debt-to-equity ratio is low at 0.038, showcasing conservative leverage levels. Return on equity has been strong, though there has been a slight decline in ROE in the TTM as compared to 2024. The company maintains a substantial cash position, which provides financial flexibility. Overall, the balance sheet is strong, with minimal leverage risk and a robust equity base, though the slight dip in ROE warrants monitoring.

Cash Flow

NEXON Co exhibits impressive cash flow management, with a substantial free cash flow growth rate of 37.4% in the TTM, driven by strong operating cash flow performance. The operating cash flow to net income ratio is approximately 1.10, indicating effective cash conversion from earnings. The free cash flow to net income ratio is also high, at 1.07, reflecting efficient use of capital expenditures to generate free cash flow. Overall, the cash flow statement highlights robust cash generation capacity and efficient capital management, positioning the company well for future investments or shareholder returns.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	451.73B	446.21B	423.36B	353.71B	274.46B	293.02B
Gross Profit	288.20B	281.37B	281.11B	247.94B	202.34B	224.01B
EBITDA	180.13B	134.32B	140.79B	115.83B	102.75B	130.07B
Net Income	125.20B	134.85B	70.61B	100.34B	114.89B	56.22B
Balance Sheet
Total Assets	1.22T	1.26T	1.10T	1.04T	986.63B	862.16B
Cash, Cash Equivalents and Short-Term Investments	585.85B	600.87B	596.76B	432.45B	394.38B	279.91B
Total Debt	37.92B	40.00B	29.72B	23.32B	15.33B	16.59B
Total Liabilities	219.06B	226.25B	191.53B	175.30B	140.74B	141.72B
Stockholders Equity	991.93B	1.02T	896.27B	858.19B	836.67B	709.88B
Cash Flow
Free Cash Flow	133.75B	97.33B	123.00B	124.24B	91.79B	134.37B
Operating Cash Flow	138.07B	100.97B	128.71B	130.14B	105.91B	137.60B
Investing Cash Flow	64.93B	7.45B	-188.37B	-10.92B	18.08B	-140.23B
Financing Cash Flow	-91.19B	-64.78B	-78.55B	-105.86B	-21.05B	-2.63B

NEXON Co Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 2863.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:3659, the sentiment is Positive. The current price of 2863 is above the 20-day moving average (MA) of 2718.13, above the 50-day MA of 2506.60, and above the 200-day MA of 2342.59, indicating a bullish trend. The MACD of 105.48 indicates Negative momentum. The RSI at 68.26 is Neutral, neither overbought nor oversold. The STOCH value of 81.34 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:3659.

NEXON Co Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
3659	80 Outperform	$2.30T	18.95	12.67%	1.05%	10.80%	138.34%
Sector *	55 Neutral	HK$65.49B	-1.50	-1.91%	7.66%	-4.18%	-13.99%
KNM		¥3.07T	41.15	16.43%	0.79%	―	―
CCOEF		$14.16B	42.05	22.64%	0.92%	―	―
SGAMF		$4.65B	15.81	11.92%	1.66%	―	―
SQNXF		$8.93B	56.22	7.32%	0.90%	―	―
3635	72 Outperform	¥789.07B	19.80		2.03%	-1.70%	11.29%

NEXON Co Corporate Events

NEXON Co. Concludes Share Buyback Program

NEXON Co., Ltd. announced the completion of its share buyback program, which was conducted under the guidelines of the Companies Act of Japan. The program, which ran from June 1 to June 25, 2025, resulted in the acquisition of 3,453,500 ordinary shares, amounting to JPY 9,260,045,760. This move is part of a broader strategy to enhance shareholder value, as initially resolved by the Board of Directors on February 13, 2025. The total shares acquired during the entire program period amounted to 22,467,100 shares, with a total expenditure of JPY 49,820,009,708, reflecting a strategic financial maneuver to optimize the company’s capital structure.

The most recent analyst rating on (JP:3659) stock is a Buy with a Yen4340.00 price target. To see the full list of analyst forecasts on NEXON Co stock, see the JP:3659 Stock Forecast page.

NEXON Co. Exceeds Q1 2025 Financial Expectations

NEXON Co., Ltd. reported better-than-expected financial results for the first quarter of 2025, with operating profit surpassing initial forecasts. This positive outcome was attributed to strong revenue performance in Korea and lower-than-anticipated costs, including human resources and marketing expenses.

The most recent analyst rating on (JP:3659) stock is a Buy with a Yen4230.00 price target. To see the full list of analyst forecasts on NEXON Co stock, see the JP:3659 Stock Forecast page.

NEXON Co. Reports Q1 2025 Financial Results with Mixed Outcomes

NEXON Co., Ltd. reported its consolidated financial results for the first quarter of 2025, showing a 5.1% increase in revenue compared to the previous year. However, the company experienced a significant decline in profit before tax and profit attributable to owners of the parent, with decreases of 28.6% and 26.9% respectively. Despite the revenue growth, the overall financial performance highlights challenges in maintaining profitability, which may impact stakeholder confidence and market positioning.

The most recent analyst rating on (JP:3659) stock is a Buy with a Yen4230.00 price target. To see the full list of analyst forecasts on NEXON Co stock, see the JP:3659 Stock Forecast page.

NEXON Co., Ltd. Reports Progress on Share Buyback Program

NEXON Co., Ltd. announced the status of its ongoing share buyback program, having acquired 5,705,300 shares for approximately JPY 11.8 billion in April 2025. This buyback is part of a larger plan to repurchase up to 32 million shares, with a maximum budget of JPY 50 billion, indicating a strategic move to enhance shareholder value and optimize capital structure.

NEXON Announces Financial Results of Affiliated Company NXC Corporation

NEXON Co., Ltd. announced the financial results of its affiliated company, NXC Corporation, for the year ended December 31, 2024. NXC Corporation, which manages subsidiaries and real estate, reported a shareholding structure dominated by individual shareholders, with the Ministry of Economy and Finance holding a significant portion. This announcement highlights NEXON’s broader corporate structure and its strategic management of affiliated entities, which may impact its operational and financial strategies.

NEXON Co., Ltd. Reports Progress on Share Buyback Program

NEXON Co., Ltd. has announced the status of its share buyback program, acquiring 6,028,000 ordinary shares for approximately JPY 12.23 billion from March 1 to March 31, 2025. This buyback is part of a larger plan approved by the Board of Directors to acquire up to 32 million shares, with a maximum budget of JPY 50 billion, aimed at enhancing shareholder value and optimizing the capital structure.