NEXON Co (3659) AI Stock Analysis

• Market Cap: $2.08T
• Dividend Yield: 0.84%
• Average Volume (3M): 2.05M
• Price to Earnings (P/E): 17.1
• Beta (1Y): 1.03
• Revenue Growth: 10.80%
• EPS Growth: 138.34%
• Country: JP
• Employees: 9,329
• Sector: Communication Services
• Sector Strength: 91
• Industry: Electronic Gaming & Multimedia
• EPS (TTM): 32.12
• Shares Outstanding: 822,990,840
• 10 Day Avg. Volume: 1,959,920
• 30 Day Avg. Volume: 2,054,166
• PEG Ratio: -2.61
• Price to Book (P/B): 2.17
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 15.99
• 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: $2,377.12
• Price Target Upside: -8.66% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 7

• Rating: 79 Outperform
• Price Target: ¥3,041.00 ▲(16.85%Upside)

NEXON Co's stock is well-positioned with strong financial performance and positive earnings call highlights. Short-term technical strength is tempered by overbought signals, and while the valuation is moderate, the low dividend yield reduces immediate income appeal. Monitoring upcoming challenges and strategic execution will be key.

Positive Factors

Financial Performance

Nexon’s 1Q results surprised positively with OP of ¥41.6b (+43% YoY) well above the mid-point guide of ¥32.5b and Cons of ¥34b.

Stock Buybacks

A 7% capital return yield is hard to argue with, as management promises significant buybacks and dividends, making a negative view on Nexon’s shares high-risk.

Negative Factors

Earnings Guidance

Nexon's stock derated despite strong first and second quarter results due to weak guidance.

Management Changes

The departure of prior CEO Owen Mahoney added to the de-rating with an increased language barrier between domestic investors and top management.

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 exhibits strong financial health with significant revenue and profit growth, efficient cost management, and a solid balance sheet. Despite a conservative cash management strategy, the company maintains robust profitability and cash flow generation.

Income Statement

NEXON Co has demonstrated strong revenue growth and profitability over the years. The revenue growth rate for 2024 was 5.41%, indicating a positive trend. Gross profit margin has remained robust at approximately 63% in 2024, showing efficiency in cost management. The net profit margin improved significantly to 30.21% in 2024, reflecting enhanced profitability. EBIT and EBITDA margins have been consistently strong, with 2024 figures at 31.19% and 30.10% respectively.

Balance Sheet

The balance sheet reflects a strong equity position with an equity ratio of 81.09% in 2024, indicating financial stability. The debt-to-equity ratio is low at 0.39, suggesting prudent leverage management. ROE has improved to 13.23% in 2024, indicating efficient use of equity. However, the high level of cash and short-term investments relative to liabilities suggests a conservative approach to asset utilization.

Cash Flow

NEXON Co's cash flow statement reveals strong free cash flow generation, with a slight decline in free cash flow from 2023 to 2024. The free cash flow to net income ratio was 0.72 in 2024, indicating robust cash conversion from profits. Operating cash flow to net income ratio was 0.75, reflecting effective cash management. The free cash flow growth rate was negative, but overall cash flow remains strong.

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
	EBIT
137.20B	139.20B	137.68B	158.77B	138.42B	111.45B
	EBITDA
180.13B	134.32B	141.81B	115.83B	102.75B	130.07B
	Net Income Common Stockholders
125.20B	134.85B	70.61B	100.34B	114.89B	56.22B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
585.85B	600.87B	596.76B	432.45B	394.38B	279.91B
	Total Assets
1.22T	1.26T	1.10T	1.04T	986.63B	862.16B
	Total Debt
37.92B	40.00B	29.72B	23.32B	15.33B	16.59B
	Net Debt
-303.03B	-291.93B	-250.79B	-386.04B	-349.91B	-235.98B
	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: 2602.50
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

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 2602.5 is above the 20-day moving average (MA) of 2555.95, above the 50-day MA of 2302.71, and above the 200-day MA of 2362.88, indicating a bullish trend. The MACD of 86.31 indicates Positive momentum. The RSI at 63.96 is Neutral, neither overbought nor oversold. The STOCH value of 49.49 is Neutral, 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	79 Outperform	$2.08T	17.11	12.67%	0.84%	10.80%	138.34%
Sector *	61 Neutral	$14.37B	5.86	-4.31%	3.69%	2.75%	-35.55%
KNM		¥2.67T	36.69	16.43%	0.82%	―	―
CCOEF		$12.45B	39.61	22.64%	0.89%	―	―
SGAMF		$3.85B	14.61	11.92%	1.71%	―	―
SQNXF		$7.42B	46.51	7.32%	1.37%	―	―
3635	72 Outperform	¥773.18B	19.41		2.62%	-1.70%	11.29%

NEXON Co Corporate Events

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.