Nintendo Co (7974) AI Stock Analysis

• Market Cap: $15.87T
• Dividend Yield: 1.21%
• Average Volume (3M): 5.77M
• Price to Earnings (P/E): 56.9
• Beta (1Y): 0.81
• Revenue Growth: -27.51%
• EPS Growth: -35.35%
• Country: JP
• Employees: 7,724
• Sector: Communication Services
• Sector Strength: 92
• Industry: Electronic Gaming & Multimedia
• EPS (TTM): 35.74
• Shares Outstanding: 1,298,690,000
• 10 Day Avg. Volume: 6,734,120
• 30 Day Avg. Volume: 5,769,693
• PEG Ratio: -17.20
• Price to Book (P/B): 5.11
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 0.00
• 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: $13,470.27
• Price Target Upside: -1.17% Downside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 11

• Rating: 69 Neutral
• Price Target: ―

Nintendo's stock score is primarily driven by its strong financial performance, underscored by high profitability, a debt-free balance sheet, and consistent cash generation. The technical analysis presents a mixed outlook with short-term consolidation signals, while the valuation suggests that the stock may be priced for growth, potentially limiting immediate gains. Overall, Nintendo remains a financially resilient company, but investors should be cautious of its current valuation levels.

Positive Factors

Growth Projections

Analysts forecast over four times operating profit growth in the next three years, with further earnings growth anticipated.

Product Launch Success

Nintendo Switch 2 sold over 3.5 million units globally in just four days, marking the fastest console launch ever.

Strategic Positioning

Nintendo is currently #6 in terms of market cap in Japan, with the potential to become the largest in a few years.

Negative Factors

Cost Adjustments

The target price for Nintendo has been lowered following revised forecasts, reflecting adjustments for tariff impacts and increased SG&A costs.

Market Reaction

The impact on the share price following the announcement was limited, with shares opening 4% lower on the day.

Tariff Impact

US tariffs are expected to significantly depress Nintendo's gross profit, with an impact greater than current market expectations.

Nintendo Co Business Overview & Revenue Model

Company Description

Nintendo Co., Ltd., together with its subsidiaries, develops, manufactures, and sells home entertainment products in Japan, the Americas, Europe, and internationally. It offers video game platforms, playing cards, Karuta, and other products; and handheld and home console hardware systems and related software. The company was formerly known as Nintendo Playing Card Co., Ltd. and changed its name to Nintendo Co., Ltd. in 1963. Nintendo Co., Ltd. was founded in 1889 and is headquartered in Kyoto, Japan.

How the Company Makes Money

Nintendo primarily generates revenue through the sale of hardware and software products. Its hardware segment includes consoles like the Nintendo Switch, which has been a significant driver of sales. In addition to hardware, Nintendo earns substantial income from the sales of its proprietary video game titles, which include some of the best-selling games globally. The company also generates revenue through digital distribution and online services via the Nintendo eShop, offering digital downloads of games and additional content. Licensing deals, merchandise sales, and mobile game applications further contribute to Nintendo's earnings. Strategic partnerships and collaborations, such as those with The Pokémon Company and other developers, also play a vital role in expanding its product offerings and revenue streams.

Nintendo Co Financial Statement Overview

Summary

Nintendo demonstrates strong financial health characterized by high profitability, a robust balance sheet with no debt, and consistent cash generation. While revenue has seen minor fluctuations, the company's financial resilience is evident in its strong margins and substantial equity base. Continued focus on revenue growth and cash flow transparency will further enhance its financial standing.

Income Statement

Nintendo shows strong profitability with a high gross profit margin of 60.1% and a net profit margin of 25.9% in the TTM. Despite a slight decline in revenue from the previous year, the company maintains robust EBIT and EBITDA margins at 25.3% and 31.2% respectively, indicating efficient cost management and operational excellence.

Balance Sheet

The balance sheet is exceptionally strong with no debt, resulting in a debt-to-equity ratio of 0. The return on equity is impressive at 11.9%, reflecting effective use of shareholders' funds. The equity ratio of 79.5% indicates a solid capital structure with a high level of equity financing.

Cash Flow

Cash flow metrics show a mixed picture; while the company has maintained a positive free cash flow, the absence of detailed cash flow data for the TTM limits a full assessment. Historically, Nintendo has demonstrated strong cash generation with a high free cash flow to net income ratio.

Breakdown	TTM	Mar 2024	Mar 2023	Mar 2022	Mar 2021	Mar 2020
Income Statement
Total Revenue	1.23T	1.67T	1.60T	1.70T	1.76T	1.31T
Gross Profit	741.62B	954.34B	885.44B	946.04B	970.47B	641.70B
EBITDA	385.20B	698.75B	515.41B	603.29B	651.43B	361.93B
Net Income	319.75B	490.60B	432.77B	477.69B	480.38B	258.64B
Balance Sheet
Total Assets	3.39T	3.15T	2.85T	2.66T	2.45T	1.93T
Cash, Cash Equivalents and Short-Term Investments	2.15T	2.25T	1.88T	1.71T	1.74T	1.22T
Total Debt	0.00	6.13B	6.29B	6.23B	5.77B	2.16B
Total Liabilities	694.22B	546.40B	587.82B	593.08B	572.30B	393.19B
Stockholders Equity	2.69T	2.60T	2.27T	2.07T	1.87T	1.54T
Cash Flow
Free Cash Flow	0.00	445.97B	300.65B	282.07B	605.10B	337.91B
Operating Cash Flow	0.00	462.10B	322.84B	289.66B	612.11B	347.75B
Investing Cash Flow	0.00	-630.63B	111.51B	93.70B	-136.53B	-188.43B
Financing Cash Flow	0.00	-236.96B	-290.97B	-337.01B	-194.94B	-111.03B

Nintendo Co Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 13630.00
• 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:7974, the sentiment is Positive. The current price of 13630 is above the 20-day moving average (MA) of 12417.75, above the 50-day MA of 11851.50, and above the 200-day MA of 9830.91, indicating a bullish trend. The MACD of 454.61 indicates Negative momentum. The RSI at 68.93 is Neutral, neither overbought nor oversold. The STOCH value of 94.26 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:7974.

Nintendo Co Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
7974	69 Neutral	$15.87T	56.92	10.29%	1.21%	-27.51%	-35.35%
Sector *	58 Neutral	C$3.18B	5.94	-0.75%	6.69%	-2.19%	-11.60%
KNM		¥3.07T	41.15	16.43%	0.80%	―	―
CCOEF		$14.11B	42.05	22.64%	0.88%	―	―
NEXOF		$15.99B	20.22	12.67%	0.95%	―	―
SGAMF		$4.63B	15.81	11.92%	1.66%	―	―
SQNXF		$8.93B	56.22	7.32%	0.94%	―	―