On Thursday, Nintendo posted their financial results for the fiscal year ending in March 2018 – predictably outlining the Switch’s phenomenal performance, which resulted in an over 500% increase in profits for the videogame giant.
However, Nintendo was conservative with its operating profit guidance, estimating that its OP will increase by just 26.7 percent from the year prior.
While this would achieve Nintendo’s highest profit since the fiscal year end in March 2010, it misses analyst estimates by about ¥83.7 billion – resulting in a slight decline in Nintendo’s stock on Thursday.
However, Jefferies analyst Atul Goyal sees a far more positive outlook for the Godfather of gaming. He believes NTDOY’s 12-month price target will hit ¥79,900 - far beyond the average analyst price target of ¥59,582.
Goyal believes the “OP could more than triple in 2 years” – due to the Switch’s success, growing digital adoption of console games, and the mobile game revenue Nintendo has recently seen.
And for those still doubting Nintendo’s mobile IP: they brought in ¥39.3 billion in sales – an increase of 62% year-over-year. That’s no small chunk of change.
All things considered, now could be a solid time to play the Nintendo stock game. Goyal believes it’s the "cheapest game stock in the world” today – but that it won’t be this way for long.
Buy low and sell high, friends!
Do you think Nintendo will be able to maintain its strong performance, or will the bubble eventually burst? Share your predictions with us below...