[Summary] (Reading time approximately 5 minutes)
The reasons behind the continued decline in Nintendo's stock can be summarized into three points: ``advanced expectations,'' ``deceleration in business results,'' and ``absence of the next growth driver.'' Switch has entered its maturity stage, and growth in both hardware and software has slowed down. The latest financial results confirmed a decline in sales and profits, and the actual numbers showed weakness. On the other hand, the details of next-generation machines remain unclear, and there is a lack of material to support stock prices. As a result, the growth expectations that had been factored in so far have disappeared, and valuation adjustments continue. Although competitiveness has been maintained, it is in a typical transitional trough and is unstable in the short term. The turning point will depend on concrete information about next-generation machines and the restructuring of market expectations.
Introduction
Nintendo stock continues to fall even without any clear negative news.
This is not abnormal. Rather typical movement.
Stock prices are not “facts”; Driven by “Changes in Expectations”.
Conclusion: 3 factors
The reason Nintendo's stock price is weak is simple.
Key point Key point Key point't see the next growth
These three things are happening at the same time.
1. My expectations were too high
The stock price so far is
"Growing again with next-generation machines"
It was evaluated on that premise.
However, the current situation is
Key point Key point Key point
In other words,
A state where only expectations were factored in first.
If those expectations waver even a little, Stock prices naturally fall.
2. Business performance slowdown has become a reality
The Nintendo Switch is entering a period of maturity.
Key point Key point
Most recently,
Key point Key point
The important thing here is that
"Weak as a result, not as a forecast."
The market is strongly pricing in this fact.
3. I can't see the next growth.
Stock prices look into the future.
But now,
Key point Key point
As a result,
"Blank period" is occurring.
During this period, ratings tend to decline.
Why hasn't the decline stopped?
What happens when these three things overlap?
Key point Key point Key point't see the future
→ Weak reason to buy
In other words,
"There is some selling, but there is little buying"
This is the essence of never ending decline.
Current location from an investment perspective
The current situation can be summarized as follows.
Key point Key point Key point
The important thing here is that
Company quality and stock price movements are two different things.
Next 6 months
Unstable in the short term.
Key point→ push down due to confirmation of deceleration Key point→ Difficult to rise
In other words,
The market is in a range with little sense of direction or is on the decline.
Next year
A lot can change in a year.
Key point Key point Key point
Here,
Determined by stock price trends.
Scenario analysis
Bull case (35%) Details of the next generation machine have been clarified. Expectations were rebuilt and stock prices rebounded.
Base case (45%) Lack of information continues. Stock prices are flat to moderately declining.
Bare case (20%) Delays and poor performance. Ratings drop further.
Investment risk
Risk 1: Delays in next-generation devices Directly linked to the collapse of expectations.
Risk 2: Weak initial sales The growth story is denied.
Risk 3: Lack of software Profit recovery will be delayed.
Risk 4: Overall market deterioration The decline is accelerating due to the external environment.
Summary
The reason why Nintendo stock continues to fall is clear.
Key point Key point Key point't see the next growth
That is, currently
“Expectations Adjustment Phase”
The conditions for bottoming out are also clear.
Key point Key point
Until then,
This is not a phase to rush into.