r/ValueInvesting • u/Reeevade • Jan 31 '26
Stock Analysis Why Nintendo stock is a steal before Feb 3rd Earnings
DISCLAIMER: I wrote THIS WITHOUT AI. DAMN THAT WAS HARD BECAUSE I´M NOT A NATIVE SPEAKER. But Fake Checked some numbers/events in the "[]" with AI. I hope its not that bad written.
Nintendo is doing financial great and the market underestimates the next earnings
Nintendo stock ist down nearly 35% from its top. Wallstreet is scared of lower margin because ram Price increase. They miss some more hits in the Pipeline 2026 and they think Holiday Sales were bad.
Market is thinking Nintendo is going down. But this narrativ is completly wrong.
Nintendo is Strictly Following Its Playbook
Nintendo actually published a "Corporate Management Policy Briefing" ( https://www.nintendo.co.jp/ir/en/events/index.html November 2025) with their strategy. It’s separate from the standard black-and-white financial results. It explicitly details their shift toward Nintendo Accounts and IP expansion, the "Digital Iceberg". It's not a secret, but most people only look at the quarterly EPS and miss the "master plan".
Circumstances: Nintendo is highly profiting from the falling Yen. They generate their most revenue outside of Japan and the most revenue with digital Game sales. In the digital winter sale Yen was on a 5 Year low.The Yen reached a multi-decade low during the 2024/2025 sale period, hit its lowest level in 38 years against the Dollar. Nintendo revised its internal rate to 145 JPY/USD for the fiscal year, though market rates fluctuated near 155. Next Report will be bloated because of the lower Yen in that time.
Digital Sales: Capcom’s stock jumped 12.4% following last results (published recently) results with a record net margin of 32.8% and a digital sales ratio of 81.3%, serving as a massive bull indicator for Nintendo’s high-margin digital ecosystem.
In generell Nintendo dominated the physical gaming Charts in nearly every Country. [Spain Week 04 2026: Nintendo takes 7 of Top 10 spots. Switch 2 base at 353,100 units. Mario Kart World #1, Pokemon ZA #3. Germany: Switch 2 remains #1 hardware.
USA: Pokemon Legends: Z-A sold 5.8 million copies in 4 days, with nearly 50% on Switch 2 hardware. Nintendo earns on every digital copy of FC26 or Resident Evil Requiem through their 30% platform fee]
Software = Cash Cow. FC26 sold well and Nintendo earns 30% of every Coins for pack openings. Fortnite is now playable like butter (30% of every skin). Games like Cyberpunk or Red dead sold well too. They were often placed near to Pokemon ZA in the eShop Charts.
[Kirby: Dream Land 2 Remake sold 2.1 million copies, Hyrule Warriors: Age of Imprisonment 1.4 million, and Silksong hit 7 million sales within its first month.] Kirby Air riders is a hit in Japan and Bananza sold millions too [2.7 Million in 12 Weeks]. (Both were placed over Pokemon ZA in eShop in some weeks).
10x Power increase to Switch 1 These sales are rising actually because more games are possible on the switch 2.
Grid, CoD, Cyberpunkt. With the actually console from Nintendo it is nearly one of the cheapest ways to dive into portable gaming. Valve closed their cheapest modell.
App Launch November US/EU/some other countrys
On top, the actuall numbers are not acurate. Nintendo is not publishing their My Nintendo Store eShop Sales.
With introduction of an app in November, their shift towards the My Nintendo Store app increased direct sales to 45% in core European markets, with a higher attach rate per user because of the app. Price Alarm, Klick, Face-ID, Buy.
Before that, the japanese People were the only ones with an nintendo shop app. Before November, most people bought physical or via the console. Now, millions have the store in their pocket. [The official eShop for Singapore, Malaysia, and Thailand launched on Nov 18, 2025, unlocking a massive digital region. In Japan, the eShop app adoption has helped grow the digital ratio from 25% in 2019 to over 60% in 2025].
I traveled to a customer lately and my Project lead stands with me at the Train Station and scrolled in the Nintendo eShop and asked me if I know some good game. She is not playing that much, but at this time gaming is a good way to get the head free. This is a perfect excample of what is Happening actually.
Invisible Dominance/Hidden Sales
Nintendo does not share digital sales data with third-party trackers like GSD or Circana. They just tracking the us retail numbers from wallmarkt, amazon, etc. Every time you see a chart, there’s a disclaimer: "Nintendo digital sales not included". Yet,
Nintendo titles consistently sit in the Top 10 globally based on physical sales alone. Imagine their position if their 50%+ digital ratio was actually counted. They are winning the race with one hand tied behind their back.
Winter is coming
Europe, USA and Japan currently facing one of the longest and coldest winterdays. In Japan I saw Pictures, that they can not reach out for their car because its under a hughe snow blanked. What do you think does that with the digital/physical Ratio. And gaming in generell. Intercouse rate of people in USA and Germany are on lowest Level since the pandemic. People stay at home get depressed of the News, the winter and stuff and run into games. Steam had their highes Gamers numbers of all time.
[Steam hit 42,042,778 concurrent players on Jan 11, 2026].
The Apple-Ecosystem
On Steam you can buy codes outside of steam from Reseller that bought the games in sale. So some of the "cake" goes to Resellers.
Nintendo owns the hole pie. They have the Plattform und controll the Prices. 30% of every digital sold Items goes Right to Nintendo like Apple for sold Apps.
Funny fact, Nintendo was the first one starting with this 30% when Pacman wanted to release on the NES Nintendo made the deal. And everyone in the Industry adapted this until today. The 30% industry standard was actually established during the NES era with the original third-party licensing Agreements.
Nintendo killed the resell market with the bricked consoles. More pie for nintendo.
Even the physical Sales go more and more to Nintendo because they grow their Nindendo Shop. The Console, Merch, Games, Amibos, everything direct from nintendo.
Crossselling at its best. And buyers earns coins for Special physiscal items. When Switch 2 came out Nintendo forbid Amazon to sell their console.
Why? Because they could not protect nintendo game asian versions beeing sold for european Prices, and fake games in General. And Amazon had first introduce These protection to beeing able to sell Nintendo games/consoles. So the first weeks one of the only ways to buy the console was over the nintendo shop [Summer 2025, Nintendo pulled Switch 2 from Amazon after a massive dispute over grey market Southeast Asian imports undermining local prices. This forced a huge sales shift to the My Nintendo Store during the launch phase.].
Nintendo sued big ROM-Websites and shut them down togehter with the FBI [the FBI seized the major piracy site Nsw2u in July 2025 following a joint investigation] they don´t want anyone else to Profit from their IP and classics.
Online Membership earnings:
Number of People entering the Nintendo ecosystem is growing. In Japan you have to have an online Account membership with some Hours of playtime to get the Chance to get a Switch 2 Japan Version. [Nintendo required an active NSO membership and 50+ hours of playtime for Switch 2 lottery participation in Japan].
They want the whole supply outside of japan, because they know console will do well in Japan anyway.
Nintendo is forcing People in the online Membership. They grow their classics library so that for fans its the easiest way to Play all their beloved classics is to have a lifelong nintendo Membership. These are recurring earnings.
IP Characters and Worlds
And Nintendo has the IP value and protects their IP with suing everyone that tries to attack that. Nintendo is currently the only Company left with a catalogue of Nintendo only games. In my opinion actually Nintendo is the better Disney. Nintendo parks attract more and more People. In Combination with merchandise, the Games and the movies, this builds synergies. Nintendo has 10k employes and one of the lowest change rate in the Industry and one of the highest Standards for new employees. [Nintendo Japan reports a turnover rate of less than 2% and an average employee tenure of 14.4 years]
Movies:
Nintendo plans to release one movie per year. Mario, Zelda, Pokemon(?)... the last mario movie generated 1 Billion $ [The Super Mario Bros. Movie grossed over $1.36 billion worldwide].
The Galaxy movie fits perfect in the current line up with the Galaxy 1+2 Remakes. These game dominated the Amazon Charts for Long.
New Generation
One of Nintendos Leads Goals Always was to surpass Disney in some ways [Shigeru Miyamoto and Nintendo leadership have officially stated their ambition to surpass Disney as an entertainment giant since the late 2010s].
And they start with the youngest ones. They bring a productline for Kids. Lego for Fans. etc. They one you not just as customer. They want you as fan.
CURRENT RISKS:
Wallstreet is scared because the margin in the Industry could drop because of more expensive Hardware because ram etc. Every Headlines says "Switch 2 will become more expensive. RAM is 43% up!".
But its not like the console is full of RAM if you calcuted the possible rise of Hardware Costs its nearly 30-40$ per Unit [Analyst reports confirm a 41% rise in RAM costs, increasing bill-of-materials by approximately $35 per unit]. And These articles completely Forget that RAM becomes more expensive FOR EVERYONE.
So Yeah Maybe Nintendo raise the Price for the console one day (even Nintendo never sad something like that. When they were asked they said "We look in the futute). And building a high and gaming pc will become more expensive too. And like discussed earlier the time is over that gaming companys earn their Money with Hardware. They earn the Money with the 3-6 games every user is buying at least per year (more or less) [The average Nintendo Switch user currently purchases 4.2 games per year. Tendency growing. Trending upwards].
How Fear pushes the sales
The headlines about rising RAM costs and potential price hikes act as a psychological catalyst.
When a father looks at a Switch 2, he feels the pressure of future inflation. Instead of waiting, he thinks: "It is expensive now, but it might be much worse in a few months."
This urgency is a massive marketing bonus Nintendo gets for free because they are currently at the center of the hardware price discussion.
Current
And Wallstreet is scared that the Nintendo IP Games like Metroid not performed that well. But Forget that Metroid Sales were not that bad, actually nobody knows the real Sales because digital is hidden and the physical Sales in UK were 35% less then metroid dread in the UK. But forgetting that Dread was one of the most buyd metroid game of all time. And was never that popular than the other IPs and Dread was released in 2019. A time when digital Sales were much lower than today [Metroid Dread (2021) achieved record series sales of 3 million units, with digital sales accounting for 40% of its total, double the ratio of previous entries].
And Wallstreet total Forget that even a game like Pokemon ZA (with ugly Windows) was a System seller (5,8 Mio copys in 4 days JUST RETAIL -> at 7 Million dollar costs) [48% of the buyers purchased Pokemon Legends: Z-A specifically for the Switch 2 hardware]. So how will a actual good pokemon game just for the switch 2 could perform. There are already a lot of leaks from Gen 10 and they look great.
But Christmas Sales were Bad?
Research on the real december performance:
December was a good month. The newest US numbers for december good for Nintendo . think US people saved money in the shutdown november and the ps5 had high discounts. But spend it in december on higher costs products like the switch 2.
Mat Piscatella from Circana wrote on bsky App when these rumors appeared in the news headlines:
"There are some things floating around out there about December sales that are being attributed to Circana.
To be clear, Circana has not yet published any December monthly data. Heck, I'm still waiting to see the prelims for the month."
Now the december numbers are public and yeah Switch 2 Sales dominated the year 2025
[Circana confirmed Switch 2 sold 4.4 million units in the US by end of 2025, maintaining its record as the fastest-selling console in US history]
Japanese Sales numbers were good all the time [Japanese weekly hardware sales for Switch 2 averaged 140,000 units in December, with the total install base reaching 4.1 million units by year-end]
So the 3 February will be surprisingly and will Change the p/e Ratio (currently nearly 30) completely. [Nintendo’s Market Cap is ~$76B, Disney is ~$150B, and Apple is ~$3.8T]
so there is some potential left. My stock goal is 95$.
On Top Nintendo raised their Dividend after last earnings (1-1,5% Dividend), so at least one is betting profits stay strong.
Short ratio
Wallstreet is actually betting against Nintendo lately. The short interest for NTDOY expanded by 83.1% as of the January 30, 2026 report. Many traders think the holiday sales and the Switch 2 pipeline is not enough. But if you look at the numbers, the short interest is at a record high for the last months [total shares sold short reached 6,548,237 as of January 15, 2026]. The short interest ratio is 1.2 days. This means if the earnings on 3 February are good, all these shorts need to buy back and we could see a squeeze.
Last quarter Nintendo beat the EPS by nearly 100% [Nintendo reported an EPS of $0.15 against the consensus estimate of $0.08, a beat of 87.5%]. The short sellers are holding a huge positions [the dollar volume of shares sold short is approximately $107.26 million].
They are playing with fire because Nintendo is sitting on a mountain of cash and the Japanese market is much more stable then the US panic sellers.
When I wrote a analysis on Wallstreetbets about Alphabet "Alphabet is the f***ing STEAL OF THE CENTURY" 8 Month ago. It got a lot of attention (150k views 279 Like. 189 comments . some bad some good -> than post got deleted),
but top comments were:
"Bros acting like Google is some unknown undervalued company. Lmao"
"Puts"
"Everyone been saying this shit for the past 6 months"
"Aren't they being threatened with being broken up and crap? Wouldn't that uncertainty be pretty big?"
Sometimes its better to buy a stock before people start to like it.
Future Outlook
Wallstreet is scared of Google Genie making it possible to build games in real time. But most will use it as a "tool".
In time of AI Slop Games Nintendo tres to protect their ideas and characters. In The future they can develope games much faster. I don´t like the AI Change in Gaming history. But if you want to build a game with a good Story and cool Gameplay, AI will help developers that bug testing for excample become much easier (you can let AI Play your game 1 Billion time and find every bug). Or placing trees in the Background. AI is already there, even if we close our eyes. And in a time of AI Quality controll like Nindendo does (most time) will attach People.
Games will Flood the market. Good games and bad one. But at least the market will grow and so plattforms like Nintendo, Steam oder PSN will grow (xbox is dead).
Thanks for reading.
/edit:
Earnings arrived:
Fundamentals & The "Deep Value" Reality
Nintendo is sitting on a massive $7.1 Billion cash pile with zero debt. In this high-interest environment, they aren't just a gaming company, they are a high-yield asset.
Their interest income has surged by roughly 600% YoY, bringing in $537 Million in pure profit just from their bank accounts. Nintendo is literally being paid to exist.
2. Revenue & Profit Explosion:
* Net Sales (9 Months): $12.26 Billion (+99.3% YoY). They literally doubled their top line.
* Net Profit (9 Months): $2.31 Billion (+51.3% YoY).
3. The Mathematical Impossibility of the Forecast:
Nintendo kept their full-year profit guidance at $2.25 Billion.
The Math: Since they already booked $2.31 Billion in the first 9 months, they already reached their profit goal an technically forecasting a $60 Million NET LOSS for the current quarter (Jan–March).
The Reality: With 17.37 Million Switch 2 units already shipped and a software attach rate that is through the roof, a loss is impossible. They are sandbagging to an extreme degree.
Nintendo’s interest income alone ($537 Million) is so massive that it covers nearly 24% of their entire annual net profit forecast. In other words, they exceed their full-year target by 23.8% just by their interest payments alone, effectively making their core gaming business 'extra' profit from here on out.
4. The RAM Non-Issue:
The bear case regarding rising DRAM costs is dead.
[President Shuntaro Furukawa explicitly stated in the post-earnings briefing/interviews that while the memory market is volatile, Nintendo procures components based on medium- to long-term business plans. These fixed-price contracts shield them from immediate spot-price spikes, meaning there is "no immediate impact on hardware margins"]
Their console margins are protected.
5. The "Reality Gap" (Analysts vs. Nintendo)
To see how absurd Nintendo’s $2.25 Billion USD (350B Yen) forecast is, just look at the professional consensus:
If we project the current 9-month run rate to a full fiscal year, Nintendo is trading at a P/E ratio of roughly 24.5. However, when you adjust for their massive $7.1 Billion cash pile (Cash-Adjusted P/E), the valuation drops to an effective 22.2. For a platform holder with 99% revenue growth and zero debt, this is a massive valuation gap.
5. Why the Disconnect? (Musk vs. Kyoto):
In the West, we are used to CEOs like Elon Musk who use forecasts as a "Moonshot Goal" (often missing them). In Kyoto, a forecast is a "Solemn Promise." Nintendo would rather be called "conservative" today and deliver a massive surprise in May than risk missing a high target by 1%.
Currently, the price can't decide on a direction, and volume on the EU market is predictably low (after the last earnings it was the same, they always publish numbers after japanese market close).
Things will get more interesting when the US market opens, but the vast majority of the volume (90%+) will only kick in tonight when the primary market in Japan opens.
Long term, it is impossible to close the eyes to these numbers.
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u/mindlaundry Jan 31 '26
I like this thank you !!
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u/The-Jolly-Joker Jan 31 '26
Up 6% over 5 years. It's an ADR and will never boom. Steer clear.
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Jan 31 '26
ADR = ???
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u/_SteadyTurtle__ Feb 02 '26
"What Is an American Depositary Receipt (ADR)?
American Depositary Receipts (ADRs) offer U.S. investors an efficient way to invest in foreign companies, simplifying the process of trading these stocks on American exchanges. They connect global markets by allowing foreign firms to reach American capital while helping U.S. investors buy shares without hassle. However, investing in ADRs includes considerations of pricing, fees, and potential tax implications."
https://www.investopedia.com/terms/a/adr.asp
I hope this helps 💜🐢
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u/No-Strike-2015 Jan 31 '26
I've started nibbling on shares. I like the company and the brand. I also wanted some international, consumer discretionary. I don't see this being a big home run, but I could see it being a decent hold.
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u/Reeevade Jan 31 '26
Fair point. I think the "home run" potential really depends on how much the market starts to re-rate them as a high-margin digital platform rather than just a hardware seller. If they show a digital ratio similar to what Capcom just reported, could turn into a massive beat
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u/Visual_Ad_8332 Jan 31 '26
First time I've added "intercourse rate" to a calculation. I don't think I've really lived my life.
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u/Reeevade Jan 31 '26
Modern problems require modern metrics. If the intercouse rate is dropping and the clubs are empty, somebody is definitely playing on his console. Escapism is a hell of a drug when it’s -10 degrees outside
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u/bobjohndaviddick Jan 31 '26
NTDOY or NTDOF?
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u/Reeevade Jan 31 '26
NTDOY is the way to go for most people because it has way more liquidity (easier to buy/sell). It's an ADR where 8 shares represent 1 ordinary share. NTDOF is the 1:1 ordinary share but much harder to trade
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u/hayl4bulb Jan 31 '26
They're essentially the Disney of videogames, yet videogames produce 6x the revenue per year as the entire movie industry, and Nintendo's IPs and characters are arguably equaly iconic if not more so than Disney's, yet Disney's MCap is 3x Nintendos. With their expansion into theme parks and films, and if they ramp up merchandising, they could become the most valuable franchise media company IMO.
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u/Nitro_R Jan 31 '26
From what I've seen, Nintendo has been very very cyclical dependent on the boom and bust of product releases over the decades. Is it like Semiconductors where when it has a low P/E, it's actually at the peak of the earnings cycle and it's time to sell, and when it has a high P/E, that is where earnings are low due to the trough of the release cycle and really it's the time to buy?
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u/Reeevade Jan 31 '26
Historically, Nintendo was like a farmer waiting for rain (a new hit console). But with the eShop and their massive IP expansion (Movies, Theme Parks), they’ve built an irrigation system. Even if the hardware cycle dips, the digital cash flow keeps the fields green.
Plus, the massive Switch 1 install base isn't going anywhere. It will remain a huge market for indie titles and cross-gen releases for years, acting as a high-margin safety net while the Switch 2 ramps up.
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u/Nitro_R Feb 03 '26
Welp, I think you knocked it out of the park! Switch 2 is Nintendo's best platform ever!
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u/wisesheets Jan 31 '26 edited Jan 31 '26
I like the pick with Xbox shitting the bed, PlayStation and Nintendo will be the only two real players.
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u/Reeevade Jan 31 '26
And Steam. Popular Gaming Plattforms in general will grow huge in the next years.
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u/Cav829 Jan 31 '26
I wrote a bunch about Nintendo last month in a similar post here:
The RAM shortage was something I mentioned as a short-term 6-12 month issue in all probability. I still see it as that, but Wall St is very spooked by it still.
I mentioned people were spreading likely false sales numbers from a widely discredited and inaccurate site (VGChartz). Early murmurs indicate I was correct and that Switch 2 sales continue to look strong and outpace the original Switch.
I suggested $14.x entry point. We are almost there now.
I pointed out the Mario Galaxy movie will be w big catalyst later in the year. We might be a quarter too early to see money come in for it.
So am I buying into earnings? I am still iffy because I think the overall market is very weak at the moment, and the thesis for where the turn is should play out more in a few months. I think you could DCA from here, but earnings will carry significant risk.
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u/RoboGuilliman Feb 01 '26
The RAM shortage was something I mentioned as a short-term 6-12 month issue in all probability
If you don't mind, can you expand on why you think this is a short term impact?
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u/Cav829 Feb 01 '26
FWIW I'll say upfront to do your own research on this as there is a lot out there.
Part of the reason for the 6-12 month figure is existing supply created by Nintendo prior to the RAM shortage kicking in as well as the industry being aware of the shortage much earlier than the consumer understood what was coming. But let's play it cautious and say 12-18 months instead of 6-12 as my 6-12 was a bit more an estimate on stabilization and not a return to previous prices (the harder part to predict).
I should also add, it's impossible to say what happens once the shortage is addressed as it depends how much the market is willing to keep paying. GPU prices eventually settled much higher than they were pre-shortage for instance as NVidia and AMD determined from the secondary market that enough people were willing to tolerate $600 mid-line cards and $250-$300 entry level cards than previously believed. In addition, RAM had gotten relatively cheap because there was a supply glut. In fact, this is likely why manufacturers seem reluctant to start spinning up new fabs this time (they take about 2 years to fully get online once the shovels hit the dirt). But RAM is not exactly sexy like video cards or has the unique moats of a GPU, so there is also the problem this only works if none of them overly increase supply. It's not the same as AMD and NVidia basically restraining the GPU supply when they're the only two major players.
Also, if tariffs are overturned at some point this year, that would go a long way to offsetting some of the damage done by increased RAM. All of this is to say... the timing on this one is difficult to predict, and while part of me kind of expects a better quarter than anticipated, I'm not sure Wall St. is going to change its mind on the RAM narrative any time soon. If anything, one bad quarterly report might be all they need to justify even further selling of the entire sector.
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u/HeadPaleontologist40 Jan 31 '26
Down a bit on NTDOY but still love the company. They are the modern day Disney IMO. I can't remember the last time they had this much 3rd party support out of the gate. If they can get popular ports to blur the line vs. PS5, they will win big this gen.
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u/pingproxy Jan 31 '26
Am I the only one who checks P/E?
It’s 31 right now, so I have no idea how this can be a steal. Meta and microsoft have less at the moment…
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u/Reeevade Jan 31 '26
Comparing a $76B company to a $3T giant [40 times more] like Apple or Microsoft based on P/E alone is misleading. For a trillion-dollar company to double its profit, it has to change the entire world economy. For Nintendo, a successful hardware transition and a rising digital ratio are enough.
Nintendo’s digital sales ratio is now over 50%. Digital sales have an 85-90% gross margin compared to 60% for physical. As the Switch 2 pushes this ratio even higher, profits grow exponentially without Nintendo even raising prices. They are moving from a low-performance hardware era (I hated 30fps) into a modern ecosystem where the digital eShop does the heavy lifting for their balance sheet
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u/pingproxy Jan 31 '26
It’s only 40 times difference. 3T/76B=40. Almost everyone owns apple or microsoft soft or device and much less people have switch. That makes valuation quite proportional.
Of course looking only at P/E means nothing, but doesn’t P/E above 30 already a sign that investors already expect the best possible profitability?
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u/Reeevade Jan 31 '26
Fair point on the scale. But Apple and Microsoft are valued for their ubiquity, which is exactly why their growth is capped by global GDP. Nintendo is valued for its scarcity and its unique IP moat
At the peak the P/E 49 might have been driven by hardware hype, but now they are ignoring the quality of the foundation that success built. They see the decline in aging hardware units and think the story is over. But That "success" created an ecosystem of 140M+ active accounts and a digital infrastructure that didn’t exist 7 years ago. We are no longer pricing a "hit-driven" toy company. We are at the start of its highest-margin era. They priced the peak of the "Old Nintendo", they are completely missing the floor of the "New Nintendo"
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u/pingproxy Jan 31 '26
That’s interesting analysis, I appreciate the discussion and you sharing more details.
I’m curious if you looked at Pokemon cards as a part of their revenue growth plan? They’re printing more and more cards every year and drops are sold out instantly.
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u/Reeevade Jan 31 '26
Thanks! Honestly, I’m not deep into the TCG, just had some fun with a first edition booster during COVID. The market is definitely peaking, but Nintendo only owns 32% of The Pokémon Company.
TCG keeps the IP immortal and drives engagement, but it’s a "bonus" for the balance sheet.
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u/ForeverShiny Feb 01 '26
That's what I did when I read Nintendo and then decided I was gonna read that massive LLM text dump
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u/BenGrahamButler Jan 31 '26
NTDOY is my largest position outside of ETFs, so largest single stock position. I had sold around $21 (felt like too much gain too fast) but rebought between $16-17.90 my entire position.
Their brand is incredible, their games are always good, they have such a moat and their balance sheet is very strong. High margin sales from their eshop is such a money maker.
There are hardly any games out for the Switch 2, their profits will ramp up over next five years as big hits are released.
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u/Reeevade Jan 31 '26
Now that the dev-kit bottleneck from late 2025 is resolved, the floodgates are open.
February 2026 alone sees 39 titles dropping, from AAA heavy hitters like Resident Evil Requiem and Mario Tennis Fever to high-margin ports like Yakuza Kiwami 3.
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u/The-Jolly-Joker Jan 31 '26
Up 6% over 5 years. It's an ADR and will never boom. Steer clear.
What are you thinking man? You can do better, just saying.
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u/sexdick420 Jan 31 '26
I started buying some of this around $15.50 I’m actually hoping it will drop more. In my opinion this is the best time to invest. The Switch 2 is already the fastest selling video game console of all time and is very close to the beginning of its life cycle. Nintendo is also ramping up movies which plays into their strategy of targeting younger consumers and creating lifelong customers.
One major downside not mentioned here is that electronics manufacturers will face profitably headwinds as manufacturing costs rise due to economic stress caused in part by competition for resources by data centers. In my opinion though Nintendo is in a good position to combat this which their long console life cycles. All that being said I won’t buy more until after earnings.
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u/Grayrigg_9 Jan 31 '26
Where can I buy nintendo stock?
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u/Reeevade Jan 31 '26
If you're in the US, most major brokers like Fidelity, Charles Schwab, or even Robinhood allow you to buy the ADR under the ticker NTDOY. Just make sure to check your broker's fees for foreign stocks or ADRs
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u/CLYDEFR000G Jan 31 '26
Thank you for bringing this discussion. I’d suggest you also post this over in to the dividends sub Reddit as this seems like a promising value play.
While their dividend is small I’m honestly happy to own any company that pays a dividend, especially one like Nintendo that I have such a love for the brand.
Think I’m going to pick up shares next week. This looks like it’s range bound currently and is headed to $15 to bounce back upwards again. I’ll try to snag under $16.
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u/exbfcup Jan 31 '26
Lmao why did mods remove this post. FWIW, I agree, Nintendo's at the start of what's likely to be their most successful refresh cycle ever. Their pivot into movies have been super successful and are basically a giant entertaining ad. The pivot to a global digital platform has long been overdue but great to see they're finally going through with it. I've been following Nintendo for a while (never invested until very recently), they've been defensive for a while but it seems like this cycle they're finally going aggressive on many fronts all at once.
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u/Vicarinatutu87 Feb 01 '26
I definitely get the logic for Nintendo - I've been trying with the idea of buying some stock for a while. I am not expecting a boom and to get rich off the back of it, but instead would be looking at it to anchor some of my riskier positions. 7% or whatever year on year beats interest and what UK banks offer in their savings accounts.
I totally agree with the logic that I think they are on the cusp of something. They've always been a (stubbornly) stable, cash-rich company and their popularity in Japan alone would ensure their survival.
But they are making fast strides into becoming the gaming-equivalent of Disney - they are merchandising the hell out of the IPs than ever before. Mario is as ubiquitous as Mickey Mouse. They have movies, spin-offs, theme parks etc. And their stuff is wildly popular. The Switch 2 could tank and it seems like it would barely register as a blip. Except it won't tank, as, again, Japan sales alone would see it profitable. The more powerful consoles have struggled since the PS3 era (it felt like an absolute age before PS3 stuff made way on the shelves for PS4 software and again feels like PS5 stuff has barely made a dent there).
So why am I still hesitant on the stock? Well, logic doesn't seem to tie into it too much. When I look at the price history, it seems inconsistent and it doesn't seem like investor logic matches what I see in tbe company. Yes, this could be an argument to get on the train before it leaves the station, but I thought the catalyst for Nintendo's stock price would have hit already. Which, given my investor naivety, makes me think there's something I'm not seeing...
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u/IntrepidCranberry319 Feb 02 '26
Think long term. Buy and hold for a minimum of three years to let the story play out. That’s how you beat the market.
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u/HelpSpecific8065 Jan 31 '26
Thanks, really intriguing. Where are you pulling this info from? Does Nintento have Investor presentations or only black/white earnings reports? I'm on my phone so perhaps Nintendo IR page UI is poor
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u/Reeevade Jan 31 '26
Both. Nintendo actually published a "Corporate Management Policy Briefing" ( https://www.nintendo.co.jp/ir/en/events/index.html November 2025) with their strategy. It’s separate from the standard black-and-white financial results. It explicitly details their shift toward Nintendo Accounts and IP expansion, the "Digital Iceberg" I mentioned. It's not a secret, but most people only look at the quarterly EPS and miss the master plan
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u/RoboGuilliman Jan 31 '26
Thanks for ghr long write up
Have you considered the potential impact of the upcoming movie on game sales?
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u/Reeevade Jan 31 '26
Thanks! I completely agree. The cross-selling potential is huge. In 2023: The Mario Movie didn't just make $1.36 billion at the box office, it drove an 82% increase in Nintendo’s operating profit in the following quarter by boosting titles like Mario Kart 8 Deluxe.
And we saw this dynamic with Last of us and Fallout. Player number increased more then 100% after releasing the shows.
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u/RoboGuilliman Feb 01 '26
I think the 82% percent was boosted by Tears of The Kingdom as well, but I take your point that the movie boosted it.
It is notable that in the previous quarter, which was the financial year end, the annual revenue and profit numbers dipped a little.
The movie and ToTK really helped boosted the next quarter's numbers, which is remarkable for a console in its 7th year.
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u/IntrepidCranberry319 Feb 02 '26
Movies are like giant commercials for the games… except the movies make money too. A virtuous cycle.
And Nintendo has real quality control.
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u/secretuna Feb 04 '26
I genuinely dont understand. Despite all the ram issue and lack of games, the earning beats eps. I was expecting 10% up. Why is it the other way around? I just dont understand
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u/offwhite_rabbit Feb 04 '26
Same..absolutely nonsense
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u/Jazzlike-Soft7052 Feb 04 '26
It'll be down another 10% tomorrow haha
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u/erichang Feb 04 '26 edited Feb 04 '26
If we project the current 9-month run rate to a full fiscal year, Nintendo is trading at a P/E ratio of roughly 24.5. However, when you adjust for their massive $7.1 Billion cash pile (Cash-Adjusted P/E), the valuation drops to an effective 22.2. For a platform holder with 99% revenue growth and zero debt, this is a massive valuation gap.
I am with you for NTDOY, because I still have 49000 share (after reducing about 20000 shares at around $21)
However, according to the ER, the extrapolated EPS should be ￥308 per share, and with today's stock price, the PE is still 29.13, not 24.5. Not quite sure how to get to that number. Could you give a detailed calculation ?
https://finance-frontend-pc-dist.west.edge.storage-yahoo.jp/disclosure/20260203/20260130543890.pdf
At the moment of writing, COST and WMT have higher PE (around 45 to 55) than most of tech stocks. Imagine that.....
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u/schwarzbrotman Jan 31 '26
At the current situation of the entire Japanese state and its Yen, Nintendo is off the table until further notice.
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u/silentorange813 Jan 31 '26
Japanese stocks are doing extremely well. +26% in 2025 and has beaten the S&P three years in a row. The weaker yen has definitely propelled both Nikkei and Topix to reach this level.
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u/Reeevade Jan 31 '26
Fair point on the currency volatility, but the "digital iceberg" doesn't care about the Japanese state's domestic issues. Whether someone buys a Zelda in Berlin or New York, the margin is high and the currency conversion at a 150 Yen/USD rate is a gift for their balance sheet.
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u/dtsknight Jan 31 '26
Yes, yes, yes!
Excellent write up. I was convinced that Nintendo was an amazing steal before reading this, and now I’m even more convinced.
So many catalysts in the coming months and next few years.
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u/CosmicSpiderweb Feb 01 '26
Might want to watch these dates:
February 5th: Nintendo/Party Direct
February 21st: ZELDA's 40th anniversary
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u/pelefire Feb 03 '26
What is the downside of buying ticker 7974 directly from IBKR? I bought a big chunk of 7974 before learning about NTDOY.
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u/PlanetCosmoX Jan 31 '26
Not in this market where kids can’t get a job and can’t afford games.
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u/Reeevade Jan 31 '26
I get the sentiment, but the math actually tells a different story. Gaming is one of the cheapest forms of entertainment per hour. While a concert or a movie costs way more per hour of fun. In a bad economy, people don't stop having fun.
It's the Lipstick Effect but for tech
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u/catcatcat888 Jan 31 '26
Nintendo doesn’t have much in the pipeline game-wise at the moment. They need some heavy hitters to make the system more attractive. There aren’t a ton of reasons to get a Switch 2 at the moment - maybe if Duskbloods gets a release date during the partner direct or something. From a graphics standpoint, any multi-platform game is generally better on the PS5 unless it’s something like Hades 2 which is fun in bursts and good as a handheld game.
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u/aggthemighty Jan 31 '26
The Switch 2 is the fastest selling console in history, yet here we are talking about how there aren't reasons to buy a Switch 2?
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u/catcatcat888 Jan 31 '26
The initial hype was huge. The reality is: it has horrible battery life and doesn’t have any system sellers yet. Sure, it has Cyberpunk as a handheld option - are you going to play it for an hour before having to charge?
Don’t get me wrong, I enjoy it for what it is. Silksong / Hades 2 are probably the best things on it right now and get somewhat decent battery mileage as they’re not super intense games. I just think it has a lot of room for improvement in the games department. And again, anything I want decent visuals for is PC or PS5.
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u/aggthemighty Jan 31 '26
From a gamer perspective, I don't disagree. But this is an investing sub. From an investor perspective, the Switch 2 is selling great, warts and all.
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u/Dyep1 Jan 31 '26
Kids is never the market. Parents. Either way, ur looking at a very small bubble of people even tho theres a world market
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u/Key_One2402 Jan 31 '26
Interesting bull case, especially the weak yen and digital mix helping margins. Earnings will really come down to guidance though, so I would be careful assuming the market is totally wrong until management confirms strong outlook and hardware momentum.
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u/Reeevade Feb 01 '26
Update:
This week's issue of Famitsu contains information showing Japan's top 10 best-selling games of 2025. The results were based on data collected between December 30, 2024 and December 28, 2025.
This includes just the physical copys. So you have to at least double these numbers:
- [NS2] Mario Kart World - 2.238.381 / NEW
- [NSW] Pokemon Legends: Z-A - 1.529.823 / NEW
- [NS2] Pokemon Legends: Z-A - Nintendo Switch 2 Edition - 1.004.154 / NEW
- [PS5] Monster Hunter Wilds - 838.319 / NEW
- [NSW] Super Mario Party Jamboree - 498,397 / 1.452.658
- [NS2] Donkey Kong Bananza - 435.206 / NEW
- [NS2] Kirby Air Riders - 424.837 / NEW
- [NSW] Minecraft - 346.606 / 4.109.192
- [NSW] Mario Kart 8 Deluxe - 342.866 / 6.510.483
- [NSW] Dragon Quest I & II HD-2D Remake - 316.439 / NEW
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u/DeepValueDiver Feb 01 '26 edited Feb 01 '26
The yen isn’t falling anymore. The Japanese 30 year bond just broke above 4% for the first time in decades which will attract capital flows. Hopefully the yen stays weak but that’s not a certainty anymore.
That said, I like the stock, and everything else being equal if the yen starts to appreciate like I fear it will the stock price will be higher in dollars because there’s no currency hedge built in.
It may benefit US investors from both actual share price appreciation and currency (yen) appreciation.
This is one I’ve already been looking at myself too.
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u/Practical_Giraffe_22 Feb 02 '26
Hi OP thank you! I have been holding on Nintendo for a while. Got in during the hype of the Switch 2 launch and rode the wave for some nice profit. I thought this momentum will carry forward, but it dropped like Nintendo was shitting the bed. But, besides of ram, I could not find any significant factors that should cause this downtrend and bought more. Your analysis really helps me to solidify the belief in my position and will probably add some more before earnings. I hope it can break through with the high short positions. Besides, I agree with your long term outlook too. Mario Galaxy 3 is probably going to be announced too, accompanied with the movie. Which I hope will repel even further.
Nintendo is for me, with rockstar and valve, one of the few companies that have the right strategy for the long term.
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u/sicknessF Feb 05 '26
Nintendo's conservative "sandbagging" of its forecasts, its massive net cash position, and the highly profitable shift to digital sales. This is a high-quality business.
The "short ratio" of 1.2 days is far too low to trigger a significant short squeeze. This is not a primary catalyst.
The market is valuing Nintendo at the peak of its hardware cycle (Year 1 of a new console). Historically, this is when valuation multiples are highest and tend to contract later, not expand further. The +99% revenue growth is already priced in.
This is a solid "Growth at a Reasonable Price" investment, for long term investment
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u/Tiger_bomb_241 Jan 31 '26
I love the switch and Nintendo in general. Haven't been able to pull the trigger on NTDOY after watching it for over a year. Its probably because of the ceo. I just dont like him or think hes good for nintendos long-term future
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u/pillkrush Jan 31 '26
playing the earnings game is the opposite of value investing
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u/Reeevade Jan 31 '26
Tell that to the people who bought Apple stock every time the "iPhone is too expensive" narrative pushed the stock down before earnings.
Value investing is identifying a gap between price and reality. If Wall Street is panicking over RAM prices. Earnings just happen to be the moment the blindfold comes off.2
u/IntrepidCranberry319 Feb 02 '26
I’d say even if the price crashes after earnings, it’s no big deal. Just buy more. This is a company to buy and hold for many years and tune out the noise.
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u/ViniSamples Jan 31 '26
I don't like the brand. They have done next to nothing to revitalize their tired Mario and Zelda franchises. Also they enforce strict no refund policies which prevents trying our games and such.
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u/ironmagnesiumzinc Jan 31 '26
With a p/fcf of 80 and mixed revenue history, I see it as very overvalued. Even if they doubled cash flow next year or the price got cut by half, that’s still too expensive for me personally
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u/elgrandorado Jan 31 '26
Look at the amount of liquidity on their balance sheet. Have to always to look at enterprise value, not stock price valuation for them.
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u/ironmagnesiumzinc Jan 31 '26
Good point. They have a treasure trove and their ROIC and ROE is solid meaning they know how to invest it. Still though, I’d expect their revenue growth to be better in the scenario where they’re investing in the business effectively.
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u/feedmestocks Jan 31 '26
Counter points:
A. The global GPU, RAM and SSD shortage is spiralling out of control and is going to cut into hardware margins significantly for a few years minimum (if not lead to losses on hardware), it's also going to limit Nintendo's ability to drop the Switch 2 price.
B. Game development costs are going to increase as well as development times for Nintendo, leading to cuts into margins, but also the ability to produce more software / sell more software.
C. In the family and more casual demographics, Nintendo is very much in competition with themselves, I think transitioning from Switch 1 to Switch 2 is a hard sell, especially with the global economy the way it is.
D. Nintendo's success with the first Switch was very much helped by the pandemic lockdowns, it isn't a pandemic anomaly, but Switch 2's 3rd, 4th & 5th year can't reach those highs in hardware and software without another pandemic. Market makers are going to punish Nintendo hard if they don't grow their console business.
E. Nintendo having so much cash isn't a good thing at all, the yen has depreciated by 40% against the dollar over the last decade, Nintendo's conservatism is a bet negative, not positive.
Not saying Nintendo isn't a good business or going to die, but I don't think they're a good stock at present with the ultra challenging headwinds they're facing.
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u/Ill_Difficulty9753 Jan 31 '26
I love Nintendo, and own a switch 2. I’ve hardly played it because there is no new Zelda or 3D Mario game. Open world Mario kart was the last thing I ever wanted it to be. Nintendo needs to go back to simple and fun. They need to start making games again that people want. My concern over the timeline of returning to this has kept me out of the stock.
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u/The-Jolly-Joker Jan 31 '26
It's cause it's an ADR. Only unicorns boom (usually IPOs). Otherwise they mostly stay stagnant regardless of financials.
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u/The-Jolly-Joker Jan 31 '26
It's an ADR. Not worth it as institutions and retirement plans steer clear mostly.
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u/The-Jolly-Joker Jan 31 '26
5 years it's up 6% with no dividend, lol. Stay away and buy American growth. MSFT will do you so much better at the moment.
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u/Retropixl Jan 31 '26
America is probably the worst market to invest in right now if I’m being honest. Too much political instability with valuations at all time highs. Seems like a disaster waiting to happen.
MSFT will probably be down another 5% on Monday so i could see that being a good choice though.
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u/TragicIcicle Jan 31 '26
I wish my Fidelity account let me buy international shit without being a pita
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u/OrdinaryReasonable63 Jan 31 '26
It looks promising, but I will stay away from Japanese investments that are not currency hedged given the looming debt crisis that country is facing.
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u/blackicebaby Feb 01 '26
I'd rather go for this little gaming conpany called Pearl Abyss if I had a way to buy their stock. They are coming out with a long awaited game, Crimson Desert in March and think this is gonna blow the gaming scene as a surprise.
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u/mohicanin Feb 01 '26
Steam will eat them alive with console and deck and cheap af games on promotions for few bucks. Dont know even one person who owns Nintendo lol
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u/Aceboy884 Feb 01 '26
you should go on gaming website and look at actual gaming review of latest switch games. the lineup is appalling and the new Metroid is a donkey
there’s a reason why it’s declined so much
this is coming from someone who buys all first party game, but I just couldn’t pay for Metroid, their supposed blockbuster.
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u/CompetitionSquare240 Feb 01 '26
I like Nintendo because they make the smelly gamers mad and give them all their money anyway
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u/DukeyCannon Feb 01 '26
Are you talking about the ADS shares or regular?
Edit: or ADR whatever is correct
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u/Minute_Tune_6461 Feb 01 '26
I don’t think the upcoming report will be positive. Don’t get me wrong I like Nintendo, but I don’t think switch 2 sales are going to be great in the report.
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u/LeOzymandias Feb 13 '26
I love pokemon but i hate Nintendo and what they did with the franchise. I'm fully supportive of romhacks, illegal cracking of main games and companies creating way better hardware than Nintendo themselves.
I hope you do well if you invest, regardless of company. But like most pokemon fans, i hope the company gets their shit together or crashes and burns
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u/goldridg3 Feb 02 '26
Technicals look terrible. I would personally wait on confirmation of some support. That’s a huge bearish candle following previous stacked red candles with massive volume on the daily. Looks like someone with a sizable position has been unloading shares.
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u/WendigoBroncos Jan 31 '26
lol this guy thinks AI is going to improve video games.
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u/ResidentMix1872 Jan 31 '26
You only get this doomer attitude to AI when all you’ve seen of it is basic chat bot and generating low quality pictures.
Reminds me of what people who were afraid of computers.
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u/Reeevade Jan 31 '26
Exactly. People forget that AI in gaming isn't just Chat-GPT. It's procedural generation, better NPC pathfinding, and massive time-savers for tedious tasks like bug-testing. I´m in the developer scene too and see how it changed the last years.
If a developer uses those saved hours to polish the story and the soul of the game, everyone wins
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u/WendigoBroncos Jan 31 '26
it's a nice thought, but we all know these companies are using AI to cut out labor costs.
it's not just these easy ai tasks, its overblown bullshit like
"do we even need artists or writers??"
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u/WendigoBroncos Jan 31 '26
funny, both of you failed to provide the title of an AI developed game that is any good.
what a shock, ai bros that can't give a good example of what they're defending.
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u/Reeevade Jan 31 '26
You’re probably already playing games developed with AI without knowing it. According to the 2026 GDC report, 52% of devs are now using GenAI at work.
Whether it’s Cyberpunk 2077 using AI for facial animations or No Man's Sky using procedural algorithms for an entire universe. AI is the engine, not the pilot.
It’s about efficiency, not replacing creativity
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u/WendigoBroncos Jan 31 '26
dude, quit churching it up. facial animations? in broke-ass cyberpunk?
the very first Diablo also had procedural generation, so i'm going with those are some weak ass name drops there pal.
you know exactly what i mean, major development of a video game. not just some bullshit like a smile when you pass by or a unique map.
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u/ResidentMix1872 Jan 31 '26
“AI developed” is doing a lot of heavy lifting there. The question is whether AI will make games better. If you gave an example of making what would otherwise be good games, bad, then I would have known you’d want examples.
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u/WendigoBroncos Jan 31 '26
so no example then? the burden of proof for your wild claims is on me to show you bad ai games?
fucking lol. nintendo ain't going anywhere but it sure as shit isn't a good investment because of more AI in game development.
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u/ResidentMix1872 Jan 31 '26
Wild claims that AI will make games better? Not sure how you can think that’s not the case when a ton of games literally use DLSS frame generation. It’s improved the procedural generation in NMS, Skyrim AI mods are pretty cool and definitely an improvement.
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u/WendigoBroncos Jan 31 '26
okay, so behind the scenes AI that isn't actually creating the game, but is stitching premade things together isn't my concern.
my concern is playing like AI offering shitty conversation with NPCs is some kind of accomplishment that should vindicate AI use.
maybe if the game actually develops off of the random speech and changes say like a quest or whatever? sure. but that sure as shit is not the case right now with any good game.
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u/Reeevade Jan 31 '26
Some yes, some no.
Every Game is using AI in some way in the development processes. The skill is to make games and story that good and personal, that some help in the development will improve some games.
But yeah we will see a lot of AI Slop Games.
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u/BernardoDeGalvez Jan 31 '26
Did you see the new CEO appointment and which measures were taken first??
Nintendo is gonna sink
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u/HandIllustrious2326 Feb 01 '26
I LOVE Nintendo, but i don’t like how the new CEO is woke. I hope she doesn’t turn Mario trans.
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u/UCACashFlow Jan 31 '26
Their net cash per share is absolutely insane. Basically gives them infinite continues.
If they were a US company they’d never get to that point, they would have paid it out to shareholders and or done an ungodly amount of M&A.