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NEXON Co Ltd (JP:3659)
:3659
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NEXON Co (3659) AI Stock Analysis

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JP:3659

NEXON Co

(3659)

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Outperform 71 (OpenAI - 4o)
Rating:71Outperform
Price Target:
¥3,577.00
▲(17.66% Upside)
NEXON Co's overall stock score reflects strong financial performance and positive earnings call highlights, including robust revenue growth in key franchises. However, technical analysis indicates bearish momentum, and the valuation suggests the stock may be overvalued. FX losses and challenges in player engagement also weigh on the score.
Positive Factors
Revenue Growth in Key Franchises
Strong revenue growth in key franchises like Dungeon&Fighter PC and MapleStory indicates successful content updates and market expansion, enhancing long-term revenue potential.
Strong Financial Position
A robust balance sheet with low leverage provides financial stability and flexibility, allowing NEXON to invest in growth opportunities and weather economic fluctuations.
Successful New Title Launches
The successful launch of new titles like MABINOGI MOBILE demonstrates NEXON's ability to innovate and capture market interest, supporting future growth and diversification.
Negative Factors
Foreign Exchange Losses
Significant FX losses impact profitability, highlighting potential vulnerabilities in international operations and currency exposure that could affect future earnings.
Decline in Major Franchises
A decline in major franchise revenues suggests challenges in maintaining player interest and competition, potentially impacting long-term revenue stability.
Challenges in Player Engagement
Difficulty in sustaining player engagement could lead to reduced user retention and monetization, affecting the company's ability to maintain growth in its gaming portfolio.

NEXON Co (3659) vs. iShares MSCI Japan ETF (EWJ)

NEXON Co Business Overview & Revenue Model

Company DescriptionNEXON 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 MoneyNEXON generates revenue primarily through in-game purchases and microtransactions, where players can buy virtual goods and enhancements within their games. The company employs a free-to-play model, allowing users to access games without an upfront cost, while monetizing through optional purchases. Additionally, NEXON earns revenue from subscription models and advertising revenue associated with its games. Strategic partnerships with other gaming companies and collaborations for co-development of new titles further enhance its revenue streams. The company also benefits from a strong presence in the Asian market, particularly in Japan and China, where its games have a substantial player base, contributing significantly to its earnings.

NEXON Co Earnings Call Summary

Earnings Call Date:Aug 13, 2025
(Q2-2025)
|
% Change Since: |
Next Earnings Date:Nov 11, 2025
Earnings Call Sentiment Neutral
NEXON demonstrated strong performance in key franchises and successful new title launches, with significant growth in Dungeon&Fighter PC and MapleStory. However, the earnings were negatively impacted by FX losses and challenges in sustaining player engagement, particularly in Dungeon&Fighter Mobile.
Q2-2025 Updates
Positive Updates
Strong Performance in Key Franchises
Dungeon&Fighter PC saw a 67% YoY revenue growth, while MapleStory achieved 60% YoY revenue growth. In Korea, quarterly revenue for these titles set new records with MAUs and PUs nearly doubling, resulting in 132% YoY revenue growth.
Successful Launch of New Titles
MABINOGI MOBILE exceeded expectations with strong MAUs, PUs, and ARPPU. Additionally, ARC Raiders, set for release on October 30, is currently the sixth most wish-listed game on Steam.
Strong Revenue and Operating Income Performance
Q2 revenue reached JPY118.9 billion, 8% above the high end of guidance, while operating income was JPY37.7 billion, 21% above guidance.
Shareholder Return Initiatives
Under a JPY100 billion buy-back policy, JPY50 billion worth of shares were repurchased by June, with further repurchases planned.
Negative Updates
Negative Impact of Foreign Exchange
Net income was below expectations at JPY16.8 billion due to a JPY17.5 billion FX loss on US dollar-denominated cash deposits, resulting in a 58% YoY decline.
Decline in Key Franchises
Despite some strong performances, the collective revenue for the three major franchises declined 13% YoY, with Dungeon&Fighter franchise revenue down 40% YoY.
Challenges in Sustaining Player Engagement
While there was strong initial success with the May anniversary update for Dungeon&Fighter Mobile, it was less effective at sustaining returning players than anticipated.
Company Guidance
During NEXON's 2025 Q2 earnings call, the company reported a robust performance, exceeding expectations in revenue and operating income, despite facing FX headwinds. Key highlights included a 60% year-over-year (YoY) revenue growth in the MapleStory franchise, driven by strong performance in Korea and expansion into new regions, alongside a 67% YoY revenue growth in Dungeon&Fighter PC. NEXON achieved Q2 revenues of JPY 118.9 billion and operating income of JPY 37.7 billion, surpassing guidance by 8% and 21%, respectively. While net income fell short at JPY 16.8 billion due to a JPY 17.5 billion FX loss, the company saw a 132% YoY revenue increase in Korea and double-digit growth in China due to successful content updates. Looking ahead, NEXON anticipates strong performances in Q3 from its flagship titles, despite an expected YoY revenue decline of 6% to 14% on an as-reported basis. The upcoming release of ARC Raiders on October 30 and the expansion of the MABINOGI MOBILE franchise are expected to support future growth.

NEXON Co Financial Statement Overview

Summary
NEXON Co demonstrates strong profitability with a solid financial position, characterized by healthy margins and low leverage. However, recent revenue growth challenges slightly dampen the overall financial performance.
Income Statement
75
Positive
NEXON Co's income statement shows a strong gross profit margin of 63.8% for TTM, indicating efficient cost management. However, the company experienced a revenue decline of 0.8% in the TTM period, which is a concern. The net profit margin remains healthy at 27.7%, though it has decreased from the previous year. The EBIT and EBITDA margins are robust, reflecting good operational efficiency.
Balance Sheet
80
Positive
The balance sheet is strong with a low debt-to-equity ratio of 0.038, indicating low financial leverage. Return on equity is solid at 12.4%, showcasing effective use of equity. The equity ratio is high, suggesting a stable financial structure with significant equity backing the assets.
Cash Flow
70
Positive
Cash flow analysis reveals a positive free cash flow growth rate of 12.6% in the TTM period, indicating improved cash generation. The operating cash flow to net income ratio is 1.28, showing good cash conversion. However, the free cash flow to net income ratio is slightly below 1, suggesting room for improvement in cash flow relative to net income.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue448.10B446.21B423.36B353.71B274.46B293.02B
Gross Profit281.54B281.37B285.42B247.94B202.34B224.01B
EBITDA198.82B134.32B139.45B158.30B145.29B117.01B
Net Income102.08B134.85B70.61B100.34B114.89B56.22B
Balance Sheet
Total Assets1.28T1.26T1.10T1.04T986.63B862.16B
Cash, Cash Equivalents and Short-Term Investments596.47B600.87B596.76B571.86B534.93B525.70B
Total Debt38.45B40.00B29.72B23.32B15.33B16.59B
Total Liabilities223.08B226.25B191.53B175.30B140.74B141.72B
Stockholders Equity1.04T1.02T896.27B858.19B836.67B709.88B
Cash Flow
Free Cash Flow150.57B97.33B123.00B124.24B104.33B134.37B
Operating Cash Flow154.72B100.97B128.71B130.14B105.91B137.60B
Investing Cash Flow125.03B7.45B-188.37B-10.92B18.08B-140.23B
Financing Cash Flow-103.20B-64.78B-78.55B-105.86B-21.05B-2.63B

NEXON Co Technical Analysis

Technical Analysis Sentiment
Negative
Last Price3040.00
Price Trends
50DMA
3278.26
Negative
100DMA
3052.86
Negative
200DMA
2612.99
Positive
Market Momentum
MACD
-56.38
Positive
RSI
37.79
Neutral
STOCH
11.56
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:3659, the sentiment is Negative. The current price of 3040 is below the 20-day moving average (MA) of 3178.45, below the 50-day MA of 3278.26, and above the 200-day MA of 2612.99, indicating a neutral trend. The MACD of -56.38 indicates Positive momentum. The RSI at 37.79 is Neutral, neither overbought nor oversold. The STOCH value of 11.56 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for JP:3659.

NEXON Co Peers Comparison

Overall Rating
UnderperformOutperform
Sector (60)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
¥707.97B22.242.29%-1.05%6.49%
$2.51T25.0510.04%0.99%2.84%51.14%
$561.21B35.764.51%1.85%-12.78%-56.73%
$1.73T30.9726.66%0.97%45.17%81.91%
¥3.01T39.2216.24%0.82%13.45%16.03%
$48.67B4.58-11.27%4.14%2.83%-41.78%
$1.08T58.205.77%1.72%-7.85%-3.39%
* Communication Services Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
JP:3659
NEXON Co
3,040.00
459.17
17.79%
JP:9766
KONAMI HOLDINGS
22,035.00
8,388.32
61.47%
JP:9697
Capcom Co
4,000.00
993.35
33.04%
JP:6460
Sega Sammy Holdings
2,814.50
7.00
0.25%
JP:9684
Square Enix Holdings Co
2,958.00
1,003.79
51.37%
JP:3635
Koei Tecmo Holdings Co., Ltd.
2,043.00
512.00
33.44%

NEXON Co Corporate Events

Nexon Completes Share Buyback Program
Oct 23, 2025

Nexon Co., Ltd. announced the completion of its share buyback program, which was conducted under the stipulations of the Companies Act of Japan. The program, which ran from October 1 to October 24, 2025, resulted in the acquisition of 3,502,600 ordinary shares at a total cost of JPY 11,304,484,200, marking the end of the buyback initiative that was resolved by the Board of Directors on August 13, 2025.

The most recent analyst rating on (JP:3659) stock is a Buy with a Yen3577.00 price target. To see the full list of analyst forecasts on NEXON Co stock, see the JP:3659 Stock Forecast page.

NEXON Subsidiary Nitro Studio Files for Bankruptcy
Oct 21, 2025

NEXON Co., Ltd. announced that its consolidated subsidiary, Nitro Studio Co., Ltd., has filed for bankruptcy in South Korea. Nitro, which was fully acquired by NEXON Korea in 2024, failed to meet performance expectations with its in-house game, leading to the termination of its services. As a result, Nitro’s bankruptcy is seen as a necessary step to liquidate the entity, which holds significant liabilities, including loans from NEXON Korea. Despite this development, NEXON’s consolidated financial results will remain unaffected due to prior allowances for doubtful accounts.

The most recent analyst rating on (JP:3659) stock is a Hold with a Yen3441.00 price target. To see the full list of analyst forecasts on NEXON Co stock, see the JP:3659 Stock Forecast page.

NEXON Co. Reports Progress on Share Buyback Program
Oct 1, 2025

NEXON Co., Ltd. announced the status of its ongoing share buyback program, acquiring 2,680,400 shares for approximately JPY 9 billion between September 1 and September 30, 2025. This initiative is part of a broader plan approved by the Board of Directors to repurchase up to 11 million shares, reflecting the company’s strategic efforts to enhance shareholder value and optimize its capital structure.

The most recent analyst rating on (JP:3659) stock is a Hold with a Yen3000.00 price target. To see the full list of analyst forecasts on NEXON Co stock, see the JP:3659 Stock Forecast page.

NEXON Co. to Receive Significant Dividend from Subsidiary
Sep 26, 2025

NEXON Co., Ltd. announced it will receive a dividend of JPY 124,254 million from its subsidiary, NEXON Korea Corporation. This dividend will be recorded as non-operating income for the fiscal year ending December 31, 2025, but will not affect the company’s consolidated business results as it is from a consolidated subsidiary.

The most recent analyst rating on (JP:3659) stock is a Hold with a Yen3172.00 price target. To see the full list of analyst forecasts on NEXON Co stock, see the JP:3659 Stock Forecast page.

NEXON Co. Reports Progress on Share Buyback Program
Sep 1, 2025

NEXON Co., Ltd. announced the status of its share buyback program, acquiring 1,397,300 ordinary shares for JPY 4,638,340,700 from August 14 to August 31, 2025. This buyback is part of a larger plan approved by the Board of Directors to acquire up to 11 million shares by October 31, 2025, with a maximum budget of JPY 25 billion, aimed at enhancing shareholder value and optimizing capital structure.

The most recent analyst rating on (JP:3659) stock is a Buy with a Yen3811.00 price target. To see the full list of analyst forecasts on NEXON Co stock, see the JP:3659 Stock Forecast page.

NEXON’s Earnings Call: Triumphs and Challenges
Sep 1, 2025

NEXON’s recent earnings call painted a picture of a company experiencing both triumphs and challenges. The overall sentiment was positive, highlighting strong performances in key franchises and successful new title launches. However, the earnings were tempered by foreign exchange losses and difficulties in maintaining player engagement, particularly in Dungeon&Fighter Mobile.

NEXON Co. Reports Mixed Earnings Amidst Global Challenges
Aug 14, 2025

NEXON Co., Ltd. is a leading company in the online gaming industry, primarily engaged in the production, development, and distribution of PC online games and mobile games. The company is listed on the Tokyo Stock Exchange and operates globally, with a strong presence in Japan, South Korea, China, and North America.

NEXON Co. Announces Share Buyback Program to Enhance Capital Efficiency
Aug 13, 2025

NEXON Co., Ltd. has announced a share buyback program approved by its Board of Directors, aiming to enhance capital efficiency and implement a flexible capital management policy. The program will involve the purchase of up to 11 million ordinary shares, representing 1.4% of the total shares, with a maximum acquisition cost of JPY 25 billion, conducted on the Tokyo Stock Exchange from August 14 to October 31, 2025.

The most recent analyst rating on (JP:3659) stock is a Buy with a Yen4870.00 price target. To see the full list of analyst forecasts on NEXON Co stock, see the JP:3659 Stock Forecast page.

NEXON Co. Announces Increased Interim Dividend for 2025
Aug 13, 2025

NEXON Co., Ltd. has announced an interim dividend of 15.00 yen per share for the fiscal year ending December 31, 2025, reflecting a significant increase from the previous year’s interim dividend of 7.50 yen per share. This decision aligns with the company’s policy to return profits to shareholders, considering its business results and financial standing, and indicates a positive outlook for its financial performance.

The most recent analyst rating on (JP:3659) stock is a Buy with a Yen4870.00 price target. To see the full list of analyst forecasts on NEXON Co stock, see the JP:3659 Stock Forecast page.

NEXON Co. Reports Mixed Financial Results for First Half of 2025
Aug 13, 2025

NEXON Co. reported its consolidated financial results for the first half of 2025, showing a slight increase in revenue by 0.8% compared to the previous year, reaching 232,784 million yen. However, the company experienced a significant decline in profit before tax and profit attributable to owners of the parent, both dropping by over 40%. Despite this, the company announced an increase in interim dividends, reflecting a positive outlook for stakeholders.

The most recent analyst rating on (JP:3659) stock is a Buy with a Yen4870.00 price target. To see the full list of analyst forecasts on NEXON Co stock, see the JP:3659 Stock Forecast page.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Oct 24, 2025