NEXON Co (3659) AI Stock Analysis

• Market Cap: ¥2.57T
• Dividend Yield: 0.78%
• Average Volume (3M): 1.42M
• Price to Earnings (P/E): 29.0
• Beta (1Y): 0.90
• Revenue Growth: -4.40%
• EPS Growth: 89.91%
• Country: JP
• Employees: 9,329
• Sector: Communication Services
• Sector Strength: 97
• Industry: Electronic Gaming & Multimedia
• EPS (TTM): 13.92
• Shares Outstanding: 792,078,550
• 10 Day Avg. Volume: 1,500,540
• 30 Day Avg. Volume: 1,417,043
• PEG Ratio: -1.14
• Price to Book (P/B): 2.91
• Price to Sales (P/S): 6.48
• P/FCF Ratio: 18.77
• 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: ¥3,968.48
• Price Target Upside: 19.50% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 9
• EPS Forecast (FY): 160.35
• Revenue Forecast (FY): ¥541.29B

• Rating: 64 Neutral
• Price Target: ¥3,313.00 ▼(-0.24% Downside)
• Action: Reiterated Date: 02/18/26
• Date: Action: Reiterated 02/18/26

The score is primarily supported by strong financial fundamentals (low leverage, solid cash generation, and multi-year revenue growth). This is meaningfully offset by very weak technicals (sharp downtrend with negative momentum), while valuation is mixed with a relatively high P/E and only a modest dividend yield.

Positive Factors

Conservative balance sheet

Very low leverage and rising equity provide financial flexibility and downside protection. A conservative capital structure supports long-term investment in live ops, M&A optionality, and resilience through cycle swings in game demand without pressuring cash flows.

Durable live-service business model

Recurring microtransaction revenues from established franchises create multi-year predictability. Live-service design (continuous updates, events, cosmetic sales) sustains player monetization and reduces dependence on one-time releases, supporting steady top-line over several years.

Strong free cash flow conversion

High FCF-to-net-income conversion indicates quality earnings and disciplined cash conversion, enabling reinvestment in content, steady shareholder returns, and balance-sheet strengthening. Renewed FCF growth in 2025 reinforces operational cash resiliency.

Negative Factors

Margin compression

Substantially lower margins reduce internal funding for content, marketing, and R&D, raising pressure on profitability sustainability. If structural or mix shifts persist, long-term return on invested capital could decline and slow franchise reinvestment.

Weakened operating cash conversion

A drop in OCF versus accounting profit signals working-capital or timing stress that can make cash less predictable. Persistent weakening would constrain funding for live-ops cadence, content pipelines, and could force reliance on financing for growth investments.

Rising absolute debt in 2025

An increase in absolute borrowings, even from a low base, reduces strategic optionality if it continues. Growing debt service or covenant risk could limit capital allocation flexibility for game development or M&A, raising long-term financing cost sensitivity.

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 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 Financial Statement Overview

Summary

Strong overall financial quality supported by consistent revenue growth, robust margins, low leverage, and solid free-cash-flow generation. The key offset is recent margin compression and weaker operating cash flow conversion in 2024–2025, indicating some near-term profitability and working-capital headwinds.

Income Statement

Revenue has grown consistently over 2022–2025 (2025 up ~10% after low growth in 2024), supporting a solid top-line trajectory. Profitability remains strong with healthy gross and operating margins, but margins and net income have become more volatile recently: net profit margin fell from ~30% (2024) to ~19% (2025), and gross/EBITDA margins have trended down from the 2021–2023 peak levels. Overall: good growth and strong profitability, tempered by declining margins and earnings variability.

Balance Sheet

The balance sheet looks very conservative with low leverage: debt-to-equity remains under 0.08 even in 2025, and equity has steadily increased across the period, indicating strong capitalization. Total assets have also expanded meaningfully, supporting scale. Key watch item is the uptick in absolute debt in 2025 versus prior years, but leverage is still modest and does not appear constraining.

Cash Flow

Cash generation is generally strong: free cash flow closely tracks net income (roughly mid-90%+ across years), suggesting good earnings quality and disciplined conversion. After two years of flat-to-down free cash flow (2023–2024), 2025 returned to growth (~5%). The main weakness is that operating cash flow relative to net income has weakened recently (below 1.0 in 2024–2025), indicating near-term working-capital or timing headwinds despite robust absolute cash flow.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	475.10B	446.21B	423.36B	353.71B	274.46B
Gross Profit	282.01B	281.37B	285.42B	247.94B	202.34B
EBITDA	131.50B	134.32B	139.45B	158.30B	145.29B
Net Income	92.05B	134.85B	70.61B	100.34B	114.89B
Balance Sheet
Total Assets	1.41T	1.26T	1.10T	1.04T	986.63B
Cash, Cash Equivalents and Short-Term Investments	498.87B	600.87B	596.76B	571.86B	534.93B
Total Debt	83.46B	40.00B	29.72B	23.32B	15.33B
Total Liabilities	344.27B	226.25B	191.53B	175.30B	140.74B
Stockholders Equity	1.06T	1.02T	896.27B	858.19B	836.67B
Cash Flow
Free Cash Flow	163.94B	97.33B	123.00B	124.24B	104.33B
Operating Cash Flow	171.87B	100.97B	128.71B	130.14B	105.91B
Investing Cash Flow	102.25B	7.45B	-188.37B	-10.92B	18.08B
Financing Cash Flow	-118.69B	-64.78B	-78.55B	-105.86B	-21.05B

NEXON Co Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 3321.00
• 50DMA: Negative
• 100DMA: Negative
• 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 Neutral. The current price of 3321 is below the 20-day moving average (MA) of 3409.50, below the 50-day MA of 3778.79, and above the 200-day MA of 3273.71, indicating a neutral trend. The MACD of -188.99 indicates Positive momentum. The RSI at 41.70 is Neutral, neither overbought nor oversold. The STOCH value of 57.77 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for JP:3659.

NEXON Co Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
3635	76 Outperform	¥603.30B	15.97	―	2.49%	-1.05%	6.49%
9766	72 Outperform	¥2.82T	32.86	17.57%	0.84%	18.39%	23.33%
9697	72 Outperform	¥1.50T	23.38	26.66%	1.17%	45.17%	81.91%
6460	68 Neutral	¥549.82B	-40.41	4.45%	2.12%	-8.73%	-55.81%
3659	64 Neutral	¥2.57T	29.01	10.76%	0.78%	-4.40%	89.91%
Sector *	60 Neutral	$48.67B	4.58	-11.27%	4.14%	2.83%	-41.78%
9684	57 Neutral	¥938.70B	36.68	6.70%	1.80%	-12.02%	126.06%

NEXON Co Corporate Events

Nexon to Cancel All Treasury Shares, Cutting Share Count by 4.4%

Nexon’s board has approved the cancellation of 36,487,500 ordinary treasury shares, representing 4.4% of its total shares outstanding as of January 31, 2026, with the effective date set for February 27, 2026. All treasury shares held at the end of January will be retired, reducing the total number of issued shares to an expected 792,078,539, a move that typically signals a focus on capital efficiency and may enhance per-share metrics for existing shareholders.

The cancellation of all treasury stock underscores Nexon’s continued use of shareholder-return measures that can support its valuation in a competitive gaming sector. By shrinking its share count, the company potentially improves earnings per share and signals confidence in its financial position and long-term strategy, which could be positively received by investors monitoring capital allocation discipline.

The most recent analyst rating on (JP:3659) stock is a Buy with a Yen4199.00 price target. To see the full list of analyst forecasts on NEXON Co stock, see the JP:3659 Stock Forecast page.

NEXON Boosts Dividends as Cash Flow Jumps Despite Profit Decline in 2025

NEXON reported 2025 revenue of ¥475.1 billion, up 6.5% year on year, while operating profit was flat at ¥124.0 billion and profit attributable to owners fell 31.7% to ¥92.1 billion, reflecting a sharp decline in profit before tax and lower return on equity. Despite softer profitability metrics and a drop in the equity ratio to 75.0%, total assets and cash reserves grew strongly, and operating cash flow surged to ¥171.9 billion, underpinning a near doubling of annual dividends to ¥45 per share for 2025.

The company plans to lift its payout further in 2026 with a forecast total dividend of ¥60 per share and is guiding for a strong rebound in earnings in the first quarter of 2026, with revenue projected to rise as much as 44% and profit attributable to owners up to 84.4%. NEXON did not provide full-year 2026 guidance, citing difficulty in reasonably estimating results, but the robust cash position, higher shareholder returns, and bullish Q1 outlook signal management’s confidence in future growth despite recent margin pressure.

The most recent analyst rating on (JP:3659) stock is a Buy with a Yen4199.00 price target. To see the full list of analyst forecasts on NEXON Co stock, see the JP:3659 Stock Forecast page.

Nexon Completes ¥25 Billion Share Buyback Program

Nexon has completed a share buyback program authorized under Japan’s Companies Act, repurchasing a total of 6,440,100 ordinary shares on the Tokyo Stock Exchange for approximately JPY 24.99 billion during the period from November 12, 2025 to January 26, 2026. Within the most recent phase, from January 1 to January 28, 2026, the company acquired 2,234,300 shares for about JPY 9.31 billion and has now formally ended the program, a move that effectively returns capital to shareholders and may support earnings per share and shareholder value by reducing the number of shares outstanding.

The most recent analyst rating on (JP:3659) stock is a Buy with a Yen5000.00 price target. To see the full list of analyst forecasts on NEXON Co stock, see the JP:3659 Stock Forecast page.

Nexon Announces Shift in Major Shareholder as Saudi Stake Moves to Ayar First Investment

NEXON Co., Ltd. has disclosed a change in its major shareholders as of December 26, 2025, following the filing of an amended large-shareholding report with the Kanto Local Finance Bureau. Ayar First Investment Company, an investment firm based in Riyadh, Saudi Arabia, has newly become a major shareholder with 11.17% of Nexon’s voting rights, corresponding to 88,548,900 shares. At the same time, Saudi Arabia’s Public Investment Fund, which previously held the same 11.17% stake, has ceased to be a major shareholder, indicating an internal reallocation of ownership within Saudi-linked investment entities rather than an exit of capital from Nexon. The company notes that the figures are based on the shareholder report and states there are no specific disclosures regarding any impact on its future outlook, suggesting limited immediate operational implications but a noteworthy shift in its shareholder structure for investors to monitor.

The most recent analyst rating on (JP:3659) stock is a Buy with a Yen4350.00 price target. To see the full list of analyst forecasts on NEXON Co stock, see the JP:3659 Stock Forecast page.

Nexon Advances Share Buyback, Repurchasing Over 4.2 Million Shares by Year-End 2025

Nexon has reported progress on its ongoing share buyback program, disclosing that it repurchased 2,551,500 ordinary shares on the Tokyo Stock Exchange between December 1 and December 31, 2025, for a total consideration of approximately JPY 9.64 billion. Under a board authorization dated November 11, 2025, the company is permitted to buy back up to 10 million shares for as much as JPY 25 billion through January 26, 2026, and as of December 31, 2025 it has cumulatively acquired 4,205,800 shares for about JPY 15.69 billion, signaling an ongoing capital return to shareholders and potentially supporting its share price and capital efficiency metrics.

The most recent analyst rating on (JP:3659) stock is a Buy with a Yen4350.00 price target. To see the full list of analyst forecasts on NEXON Co stock, see the JP:3659 Stock Forecast page.

NEXON Co. Updates on Share Buyback Progress

NEXON Co., Ltd. announced the status of its share buyback program, acquiring 1,654,300 ordinary shares for JPY 6,045,852,900 between November 12 and November 30, 2025. This buyback is part of a broader initiative authorized by the board to acquire up to 10 million shares, reflecting the company’s strategic efforts to enhance shareholder value.

The most recent analyst rating on (JP:3659) stock is a Buy with a Yen3734.00 price target. To see the full list of analyst forecasts on NEXON Co stock, see the JP:3659 Stock Forecast page.