Nintendo Co (7974) AI Stock Analysis

• Market Cap: ¥10.98T
• Dividend Yield: 1.17%
• Average Volume (3M): 5.83M
• Price to Earnings (P/E): 19.3
• Beta (1Y): 0.59
• Revenue Growth: 24.47%
• EPS Growth: 12.54%
• Country: JP
• Employees: 7,724
• Sector: Communication Services
• Sector Strength: 97
• Industry: Electronic Gaming & Multimedia
• EPS (TTM): 137.36
• Shares Outstanding: 1,298,690,000
• 10 Day Avg. Volume: 6,683,710
• 30 Day Avg. Volume: 5,826,276
• PEG Ratio: -0.98
• Price to Book (P/B): 4.32
• Price to Sales (P/S): 10.10
• P/FCF Ratio: -1.70K
• 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: ¥13,202.61
• Price Target Upside: 39.98% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 8
• EPS Forecast (FY): 356.58
• Revenue Forecast (FY): ¥2.35T

• Rating: 67 Neutral
• Price Target: ¥10,776.00 ▲(14.25% Upside)
• Action: Reiterated Date: 03/12/26
• Date: Action: Reiterated 03/12/26

The score is primarily supported by strong profitability and an exceptionally solid, low-debt balance sheet. It is held back by weakening cash generation (negative free cash flow) and declining revenues, while technical signals remain mixed with a weaker longer-term trend.

Positive Factors

High profitability margins

Sustained gross margins above 55% and net margins around 24% indicate durable pricing power from first‑party titles and efficient cost structure. High margins provide a long‑term buffer to fund development, support returns, and absorb cyclical revenue dips without immediate profitability erosion.

Very low leverage and strong balance sheet

A very low debt profile and strong equity ratio grant durable financial flexibility: the company can fund R&D, content investments, licensing, and strategic initiatives without market financing pressure. This reduces solvency risk and supports long‑term strategic optionality.

Diverse monetization across hardware, software, services, and licensing

Multiple revenue streams—hardware, packaged and digital software, online subscriptions, DLC, and licensing—create structural resilience. Recurring digital/service income and IP licensing smooth cycles tied to hardware and title cadence, supporting more predictable long‑term cash flows and franchise value extraction.

Negative Factors

Declining revenues

A multi‑year decline in top line is a structural concern: shrinking revenue limits absolute capacity to invest in first‑party content, hardware refreshes, and services expansion. Over time persistent revenue contraction can erode competitive investment and make sustaining margins and growth profiles harder.

Weakening cash generation; negative free cash flow

Negative free cash flow despite accounting profitability signals weaker cash conversion and raises funding imperatives for capex and content spending. Over a multi‑month horizon, persistent negative FCF can force drawdowns of reserves or constrain strategic spending, reducing agility and long‑term investment capacity.

Dependence on installed base and release cadence

Heavy reliance on installed base size and timing of marquee game releases creates structurally lumpy revenue and execution risk. If flagship cadence slips or hardware engagement stalls, revenue and engagement can fall sharply, complicating long‑term planning and smoothing of recurring service monetization.

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 makes money by monetizing its gaming ecosystem across hardware, software, and networked digital services. (1) Hardware sales: Revenue is generated from selling dedicated game systems and related accessories (e.g., controllers and peripherals). (2) First-party and published software: A major revenue driver is the sale of Nintendo-developed and Nintendo-published games in both physical (packaged) and digital formats via its digital storefront. (3) Third-party software ecosystem: Nintendo earns revenue from third-party publishers selling games on Nintendo platforms, generally through platform fees/royalties and distribution margins on sales made through Nintendo’s digital store; specific fee rates are not publicly disclosed in detail (null). (4) Digital content and services: Nintendo generates recurring revenue from online memberships (e.g., Nintendo Switch Online) and associated paid tiers, as well as sales of downloadable content and other digital add-ons tied to games. (5) Licensing and IP monetization: The company earns income by licensing its characters and franchises for use in areas such as consumer products/merchandising and other media and entertainment collaborations; specific partner terms are not consistently disclosed (null). (6) Other revenue sources: Nintendo also derives revenue from ancillary activities linked to its brand and intellectual property (e.g., certain entertainment initiatives), but the relative contribution can vary by period and detailed breakdowns may be limited (null). Overall, Nintendo’s earnings are strongly influenced by its installed base of hardware, the strength and cadence of flagship first-party software releases, and the engagement and monetization of its digital services ecosystem.

Nintendo Co Financial Statement Overview

Summary

Strong profitability (gross margin above 55% and net margin around 24%) and a very solid, low-leverage balance sheet support the score. However, revenues have declined over the past two years and operating cash flow fell sharply, with free cash flow turning negative in the latest year.

Income Statement

Nintendo has demonstrated strong profitability with a consistent gross profit margin above 55% and a net profit margin around 24% in the latest year. However, revenue has declined over the past two years, indicating potential challenges in growth. The EBIT and EBITDA margins remain robust, reflecting efficient operations.

Balance Sheet

The company maintains a very low debt-to-equity ratio, indicating minimal leverage and financial risk. The return on equity is healthy, though it has decreased from previous years. The equity ratio is strong, suggesting a solid financial foundation.

Cash Flow

Operating cash flow has decreased significantly, and free cash flow turned negative in the latest year, raising concerns about cash generation. The free cash flow to net income ratio is negative, indicating potential cash flow issues despite profitability.

Breakdown	TTM	Mar 2026	Mar 2025	Mar 2024	Mar 2023	Mar 2022
Income Statement
Total Revenue	1.49T	1.16T	1.67T	1.60T	1.70T	1.76T
Gross Profit	742.86B	710.17B	954.34B	885.44B	946.04B	970.47B
EBITDA	403.11B	387.69B	698.75B	611.92B	603.29B	651.43B
Net Income	293.88B	278.81B	490.60B	432.77B	477.69B	480.38B
Balance Sheet
Total Assets	3.47T	3.40T	3.21T	2.85T	2.66T	2.45T
Cash, Cash Equivalents and Short-Term Investments	1.91T	2.06T	2.25T	1.88T	1.71T	1.74T
Total Debt	47.25B	7.16B	6.13B	6.29B	6.23B	5.77B
Total Liabilities	770.16B	673.07B	604.01B	587.82B	593.08B	572.30B
Stockholders Equity	2.70T	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: Neutral
• Last Price: 9432.00
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:7974, the sentiment is Neutral. The current price of 9432 is above the 20-day moving average (MA) of 9139.55, above the 50-day MA of 9411.22, and below the 200-day MA of 11911.74, indicating a neutral trend. The MACD of 199.57 indicates Negative momentum. The RSI at 57.29 is Neutral, neither overbought nor oversold. The STOCH value of 68.75 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for JP:7974.

Nintendo Co Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
9766	72 Outperform	¥2.69T	25.95	17.57%	0.84%	18.39%	23.33%
9697	69 Neutral	¥1.45T	33.58	26.91%	1.17%	45.17%	81.91%
6460	68 Neutral	¥523.96B	-6.55	-3.66%	2.12%	-8.73%	-55.81%
7974	67 Neutral	¥10.98T	19.28	13.46%	1.17%	24.47%	12.54%
3659	64 Neutral	¥2.20T	33.43	8.89%	0.78%	-4.40%	89.91%
Sector *	60 Neutral	$48.67B	4.58	-11.27%	4.14%	2.83%	-41.78%
9684	57 Neutral	¥914.09B	16.57	6.70%	1.80%	-12.02%	126.06%