Nintendo Co (7974) AI Stock Analysis

• Market Cap: ¥13.86T
• Dividend Yield: 0.95%
• Average Volume (3M): 5.29M
• Price to Earnings (P/E): 49.7
• Beta (1Y): 0.78
• Revenue Growth: -27.51%
• EPS Growth: -35.35%
• Country: JP
• Employees: 7,724
• Sector: Communication Services
• Sector Strength: 91
• Industry: Electronic Gaming & Multimedia
• EPS (TTM): 35.74
• Shares Outstanding: 1,298,690,000
• 10 Day Avg. Volume: 5,816,510
• 30 Day Avg. Volume: 5,294,700
• 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: ¥13,340.58
• Price Target Upside: 12.06% 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 Growth

Earnings growth is expected to set up for a very strong run as Nintendo begins its Switch 2 journey.

Market Potential

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

Pre-Order Demand

Nintendo has received over 2.2 million pre-order lottery applications for the NS2 in Japan alone, far exceeding both internal forecasts and available launch-day supply.

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.

Price Concerns

Shares have seen increased volatility, fueled by concerns that the higher price point of the Nintendo Switch 2 will weigh on sales.

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. 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	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
	EBIT
312.13B	528.94B	504.38B	592.76B	640.63B	352.37B
	EBITDA
385.20B	698.75B	515.41B	603.29B	651.43B	361.93B
	Net Income Common Stockholders
319.75B	490.60B	432.77B	477.69B	480.38B	258.64B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
2.15T	2.25T	1.88T	1.71T	1.74T	1.22T
	Total Assets
3.39T	3.15T	2.85T	2.66T	2.45T	1.93T
	Total Debt
0.00	6.13B	6.29B	6.23B	5.77B	2.16B
	Net Debt
-1.45T	-1.48T	-1.26T	-1.20T	-1.18T	-888.24B
	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: 11905.00
• 50DMA: Positive
• 100DMA: Positive
• 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:7974, the sentiment is Positive. The current price of 11905 is above the 20-day moving average (MA) of 11777.75, above the 50-day MA of 11139.36, and above the 200-day MA of 9480.56, indicating a bullish trend. The MACD of 193.83 indicates Positive momentum. The RSI at 54.28 is Neutral, neither overbought nor oversold. The STOCH value of 47.85 is Neutral, 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
9697	81 Outperform	$1.80T	37.23	22.64%	0.88%	11.28%	11.70%
9766	78 Outperform	¥2.67T	35.81	16.43%	0.82%	17.01%	26.23%
6460	71 Outperform	$551.65B	13.61	11.92%	1.71%	-8.32%	40.03%
9684	70 Outperform	¥1.08T	44.22	7.32%	1.37%	0.58%	-56.67%
7974	69 Neutral	¥13.86T	49.71	10.29%	0.95%	-27.51%	-35.35%
Sector *	61 Neutral	$14.37B	5.86	-4.31%	3.69%	2.75%	-35.55%
7860	59 Neutral	€57.17B	48.25	2.03%	3.93%	-1.27%	15.31%