Nintendo Co (7974) AI Stock Analysis

• Market Cap: $15.50T
• Dividend Yield: 0.87%
• Average Volume (3M): 4.36M
• Price to Earnings (P/E): 52.7
• Beta (1Y): 0.82
• Revenue Growth: 2.30%
• EPS Growth: -24.75%
• Country: JP
• Employees: 7,724
• Sector: Communication Services
• Sector Strength: 89
• Industry: Electronic Gaming & Multimedia
• EPS (TTM): 82.48
• Shares Outstanding: 1,298,690,000
• 10 Day Avg. Volume: 3,926,430
• 30 Day Avg. Volume: 4,361,383
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 0.92
• Enterprise Value/Revenue: 12.27
• Enterprise Value/Gross Profit: 20.13
• Enterprise Value/Ebitda: 42.85
• 1Y Price Target: $14,886.05
• Price Target Upside: 11.84% Upside
• 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

Earnings

Nintendo's Q1 results were solid, with revenue beating estimates and consensus by 1.4% and 16.9%.

Product Launch

The Switch 2 had a successful launch, with sales showing strong initial performance.

Negative Factors

Investor Perception

Several investors misunderstand Nintendo's business model, thinking earnings growth aligns with hardware sales growth.

Profitability

Hardware margins are relatively low, between 5-15%, which could affect overall profitability.

Nintendo Co Business Overview & Revenue Model

Company Description

Nintendo Co., Ltd. is a global leader in the entertainment industry, known for its innovative video game hardware and software. Founded in 1889 and headquartered in Kyoto, Japan, Nintendo develops and sells gaming consoles, handheld devices, and a wide array of video games. The company is renowned for iconic franchises such as Mario, Zelda, and Pokémon. Nintendo operates primarily in the video game sector, producing both hardware, like the Nintendo Switch, and an extensive library of game titles that appeal to a broad audience worldwide.

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	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.16T	1.16T	1.67T	1.60T	1.70T	1.76T
Gross Profit	710.17B	710.17B	954.34B	885.44B	946.04B	970.47B
EBITDA	333.73B	387.69B	698.75B	611.92B	603.29B	651.43B
Net Income	278.81B	278.81B	490.60B	432.77B	477.69B	480.38B
Balance Sheet
Total Assets	3.40T	3.40T	3.15T	2.85T	2.66T	2.45T
Cash, Cash Equivalents and Short-Term Investments	2.06T	2.06T	2.25T	1.88T	1.71T	1.74T
Total Debt	0.00	0.00	6.13B	6.29B	6.23B	5.77B
Total Liabilities	673.07B	673.07B	546.40B	587.82B	593.08B	572.30B
Stockholders Equity	2.72T	2.72T	2.60T	2.27T	2.07T	1.87T
Cash Flow
Free Cash Flow	0.00	-6.94B	445.97B	300.65B	282.07B	605.10B
Operating Cash Flow	0.00	12.07B	462.10B	322.84B	289.66B	612.11B
Investing Cash Flow	0.00	753.06B	-630.63B	111.51B	93.70B	-136.53B
Financing Cash Flow	0.00	-195.13B	-236.96B	-290.97B	-337.01B	-194.94B

Nintendo Co Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 13310.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

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 13310 is below the 20-day moving average (MA) of 13773.25, above the 50-day MA of 13304.90, and above the 200-day MA of 11024.31, indicating a neutral trend. The MACD of 90.90 indicates Positive momentum. The RSI at 45.23 is Neutral, neither overbought nor oversold. The STOCH value of 10.49 is Positive, 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	$15.50T	52.73	11.31%	0.87%	2.30%	-24.75%
Sector *	60 Neutral	$44.01B	4.39	-12.81%	4.08%	1.86%	-42.71%
KNM	―	¥3.04T	41.45	16.24%	0.67%	―	―
CCOEF	―	$11.38B	30.54	26.13%	1.00%	―	―
NEXOF	―	$18.35B	22.15	10.04%	1.60%	―	―
SGAMF	―	$4.04B	40.85	4.51%	1.66%	―	―
SQNXF	―	$8.23B	66.22	5.77%	1.29%	―	―