Overview
After Nintendo's financial results, stock prices fluctuated wildly.
The details of the financial statements themselves are
- Weak profit forecast
- Dividend reduction plan
- Maintainability of Switch 2 sales plan
There were also many negative elements.
On the other hand, the market
"It wasn't as bad as I expected."
and evaluated.
In particular, the company's defensive stance on profit margins due to the Switch 2 price increase provided reassurance, leading to a rebound in stock prices.
Financial Highlights
| Indicators | Contents |
|---|---|
| Sales | Sales expected to increase due to expected contribution from Switch 2 |
| Operating income | Concerns about declining profit margin continue |
| Final profit | Did not meet market expectations |
| Factor 1 | Switch 2 price increase |
| Factor 2 | Reversal of concerns about deteriorating profitability |
what happened
Quantity
Expectations for Switch 2 sales remain strong.
However, the market
- Sales volume
- Initial demand
than,
Demand sustainability after price increase
I'm wary of that.
Nintendo in particular has a high ratio of light users, and its price elasticity is unknown.
This is a structural risk.
Price
The biggest point this time.
Nintendo has increased the Switch 2 price.
This is for the market,
“Intention to protect profit margin”
It was accepted as such.
Previously, Nintendo had prioritized popularization, so this pricing strategy was more positive than expected for the market.
Structural changes are possible.
Cost
What the market was most concerned about was
- Memory price increase
- Semiconductor cost
- Supply chain burden
- Tariff
It was.
Before the settlement of accounts,
“Reverse spread”
There was strong concern.
However, the excessive pessimism has receded as the price pass-through policy has been confirmed.
Exchange
The strong yen remains a risk.
Nintendo has a high percentage of overseas sales, and currency fluctuations have a direct impact on profits.
This is not a temporary factor, but an ongoing risk.
Latest materials (3 months)
Financial results
In the May 8th financial results,
- This term’s profit forecast has not been achieved
- Dividend reduction *Conservative guidance
was disgusted.
Market reaction
It plummeted on May 11th.
It was sold to its lowest level since the beginning of the year.
However, there was a sudden rebound on May 12th.
This is
“The financial results weren’t too bad.”
This is due to the review.
External environment
In the market,
- Semiconductor price
- Tariff
- Member height
Continued vigilance.
On the other hand,
- AI market lull
- Backward warning of strong yen
is a constant tailwind.
Business structure
Source of revenue
Nintendo is
*Hard *Soft
- Digital sales *Nintendo Switch Online
constitutes revenue.
Profit margin
Traditionally, it relied on soft profits.
Currently,
*DLC
- Increase in digital ratio
- Online billing
As a result, earnings stability has improved.
Strengths
- Global IP
- High brand power
- Cash generation ability
- Strength for families
Weaknesses
- Hard cycle dependent
- Depends on hit works
- Price sensitivity of light tier
Implications for stock prices
This time the backlash is
“Good financial evaluation”
From
“Worst case regression”
has a strong meaning.
In particular, the market
- Maintain profit margin
- Avoiding deterioration in profitability
was evaluated.
On the other hand,
*Sales plan maintainability
- Slower profit growth
remains a cause for concern.
To increase PER,
- Digital revenue growth
- Continued improvement in profit margin
is required.
Short term (6 months)
In the short term,
*Switch 2 initial sales *Software announcement
- Demand after price maintenance
is the focus.
On the technical side,
- 7,600 yen → Short-term bottoming zone
- 7,800 to 8,000 yen → Return sale zone *Over 8,300 yen → Full-scale reversal focus
It's easy to become.
Mid-term (1 year)
In the mid-term,
*Switch Online
- Digital ratio
- Continuous billing
growth is important.
The market evaluation axis is also
“Number of units sold”
From,
“Revenue per user”
is transitioning to.
Launching large-scale IP is also an important theme.
Scenario analysis
Bullish: 35%
- Maintain Switch 2 demand *Large IP launch
- Continued improvement in profit margin
- Expanding room for stock price rise
Neutral: 45%
- Demand is strong
- However, profit growth is limited
- Box area transition
Bearish: 20%
- Demand slows down after price increase
- Decrease in profit margin
- Concerns about downward revision of guidance
Risk
| Risk | Contents |
|---|---|
| Tariff | Cost increase |
| Semiconductor prices | Deterioration of profitability |
| Foreign exchange | Profit pressure due to strong yen |
| Demand | Sales slowdown after price increase |
| Software shortage | IP input delay |
Summary
The essence of the Nintendo stock rebound is
"Exhausted bad material"
And,
“Confirmation of profit margin defense posture”
It's in
However, the current situation is
Bullish turn
rather than
Autonomous rebound due to decline in uncertainty
Many market participants view this as
From now on,
*Switch 2 demand
- Large IP
- Digital revenue
- Profit rate trends
becomes the main focus.