Amid the leaks, is now the right time to buy (Nintendo) NTDOY stock?

Nintendo Co., Ltd. (NTDOY) It’s been over seven years since the Nintendo Switch was released, and enthusiasts are starting to get impatient for a successor. It was initially rumored that it would be released in 2024, but recent reports suggest that the Nintendo Switch 2 is beyond that. Potential launch in early 2025.

NTDOY has so far remained secretive about its plans. Recent serious leaks It proposes to reveal key details about the Switch 2’s new controller, which is rumored to be different from the current design.

The biggest difference is that the upcoming controllers (called Joy-Cons) will attach to the console body using a magnetic system, unlike the current design, which relies on rails for Joy-Cons to slide on. These magnetic attachments can be: Similar to Lenovo Legion Go.Attachment requires less movement of the controller.

But unlike the Legion Go, which has a mechanical lock, this appears to be a different approach.

The source of the leaked information is spain outlets vandal, citing an accessory supplier who has touched but not seen the new console. According to reports, these manufacturers have been allowed to treat their consoles inside opaque boxes that hide their appearance, allowing you to get a feel for the overall hardware.

The switch to magnetic attachment has raised significant concerns about the new console’s compatibility with current Joy-Con models, especially in handheld mode. However, reports suggest that the console will support the Nintendo Switch Pro controller. It also appears that Joy-Cons will be supported in wireless mode, similar to how they can be used with the Nintendo Switch Lite.

Another notable detail from the leak is that the Nintendo Switch 2 will be larger than the current Switch model, but smaller than the Nintendo Switch model. steam deck. Previous reports had stated that an 8-inch LCD display would be built into the console, making a larger size a necessity.

But interestingly, the Nintendo Switch 2 is smaller than the Steam Deck, considering the Steam Deck has a 7-inch panel. That said, larger trackpads and thicker controllers on the sides of the screen could contribute to Nintendo’s console being smaller overall.

According to the cited source: vandal, the hardware for Nintendo Switch 2 is complete. However, the company is delaying the release to accommodate a more attractive lineup of games. This strategy mirrors the success of the Nintendo Switch. The Nintendo Switch has been heavily influenced by the strong lineup of titles released in its first year, including: super mario odyssey, The Legend of Zelda: Breath of the Wildand splatoon 2.

In addition to this information, previous reports also revealed that the Switch 2 will use an Nvidia chip based on the Ampere architecture with support for DLSS. There is also speculation about backwards compatibility with the current generation of consoles.

Leaked details about the Nintendo Switch 2’s innovative features have sparked anticipation and speculation that the console could succeed in the market. The release of the upcoming Nintendo Switch sequel is expected to be a key catalyst for NTDOY stock price.

Investors will be closely monitoring developments related to new next-generation video game consoles, including release dates, prices, and game lineups.

Now, let us analyze other factors that may affect NTDOY’s performance in the short term.

recent developments

Announced by NTDOY and Illumination on March 10, 2024. A new animated film based on the world of Super Mario Bros.. The animated film is scheduled to be released in the United States and additional markets worldwide on April 3, 2026, with a release throughout April in select territories.

The film is produced by Illumination founder and CEO Chris Meledandri and NTDOY CEO and researcher Shigeru Miyamoto, directed by Aaron Horvath and Michael Jelenic, and written by Matthew Fogel. The film will be co-financed by Universal Pictures and Nintendo and distributed by Universal Pictures in theaters worldwide.

On November 8, 2023, NTDOY announced the following developments: The Legend of Zelda live action movie. The film is produced by Nintendo and Arad Productions Inc. and directed by Wes Ball. It is co-financed by Nintendo and Sony Pictures Entertainment Inc., with Nintendo providing more than 50% financing.

By producing visual content for Nintendo IP in-house, NTDOY is opening new ways for audiences around the world to experience entertainment worlds built through various means separate from dedicated game consoles.

Game Console Industry Analysis

Market analysis shows that customers strongly prefer home consoles due to their improved gaming experience. Advantageous features of home consoles include online multiplayer gaming experiences and cloud support. Factors such as increasing disposable income and availability of multiple gaming options fuel the market growth.

Additionally, the integration of emerging technologies such as 3D, augmented reality, and virtual reality (AR&VR) in games is expected to drive industry expansion.

According to a Mordor Intelligence report, the global gaming console industry is expected to reach $80.98 billion by 2029. CAGR 7.2% growth During the forecast period (2024-2029). The market is moderately competitive with the following dominant players: Sony Group Corporation (SONY) and Microsoft Corporation (MSFT).

The bright growth prospects of the gaming console industry should bode well for NTDOY.

Strong financial performance and optimistic outlook for 2024

for 9 months ended December 31, 2023, NTDOY reported net sales of 1.39 trillion yen ($8.83 billion), up 7.7% from the previous year. The company sold 13.74 million Switch consoles in nine months. Operating profit increased 13.1% year-on-year to 464.41 billion yen ($2.95 billion).

Additionally, the gaming giant’s profits attributable to its parent company owners rose 17.9% year-on-year to 408.04 billion yen ($2.59 billion). Earnings per share increased 18% year-on-year to 350.48 yen.

As of December 31, 2023, NTDOY’s total assets were 3.07 trillion yen ($19.51 billion), compared to 2.85 trillion yen ($18.11 billion) as of March 31, 2023. The company’s net assets were 2.48 trillion yen ($15.76 billion) versus the Japanese yen. As of March 31, 2023, it is ₩2.27 trillion ($14.43 billion).

The Japanese video game company, which has enjoyed stellar financial performance, expects to sell 15.5 million Switch consoles in fiscal 2024, up from previous forecasts. NTDOY Net profit revised to 440 billion yen ($2.8 billion) compared to the previous forecast of 420 billion yen ($2.67 billion).

impressive historical growth

Over the past five years, NTDOY’s revenue and EBITDA have grown at a CAGR of 7.3% and 17.8%, respectively. During the same period, the company’s net profit and EPS grew at a CAGR of 23.4% and 24.1%, respectively. During the same period, total assets grew at a CAGR of 11%.

solid profitability

NTDOY’s trailing 12-month gross margin of 56.78% is 15.5% higher than the industry average of 49.17%. Likewise, the stock’s trailing 12-month EBIT margin and net profit margin are 32.81% and 29.07%, respectively, which are significantly higher than the industry averages of 8.31% and 2.62%.

Additionally, the stock’s trailing 12-month ROCE, ROTC, and ROTA are 21.27%, 15%, and 16.1%, which compare favorably to the industry averages of 2.94%, 3.39%, and 1.18%, respectively.

conclusion

NTDOY beat market expectations for revenue and revenue in its last reported quarter and raised its full-year 2024 outlook for Switch console sales and revenue. The Japanese video game company has maintained momentum on the Switch, helped by the release of “The Super Mario Bros. Movie” and the flagship Zelda game last year.

Investors and enthusiasts are now waiting for the successor to the flagship console, the Switch, to be fully announced. According to the latest reports, Nintendo Switch 2 is expected to be released in early 2025.

The company has remained secretive about its plans until now, but there has been quite a bit of leaking from its Spanish store recently. vandal It has revealed important hardware details about the Switch 2, which will likely differ from its current design.

The new controller attaches to the console body using a magnetic system. It will also be larger than the current Switch model, although not as large as the Steam Deck. Additionally, previous reports suggest that Switch 2 will integrate an Nvidia chip based on the Ampere architecture with support for DLSS.

There is also speculation that the console may offer backwards compatibility with the current generation.

The launch of Nintendo Switch 2 presents a significant opportunity for investors. Investors should closely monitor developments related to this new console, including release date, game lineup, and pricing.

In particular, NTDOY has a valuable portfolio of iconic gaming franchises, including Mario, Zelda and Pokémon. Continued innovation, strategic partnerships, and expansion into mobile gaming are expected to drive the company’s growth and profitability.

Considering these factors, it may be wise to invest in this stock for its potential profits.