Nintendo Co., Ltd. (NTDOY) currently holds a Price-to-Earnings (PE) Ratio of 41.93 as of February 2025 (Trailing Twelve Months – TTM), according to the latest financial data and stock price. This figure indicates a 3.79% increase compared to the average PE Ratio of 40.40 over the preceding four quarters. Understanding the PE Ratio is crucial for investors looking to assess whether Nintendo stock is currently overvalued, undervalued, or fairly priced relative to its earnings. This analysis will delve into NTDOY’s PE Ratio, comparing it against its historical performance and industry peers to provide a comprehensive valuation perspective.
Decoding Nintendo’s Historical PE Ratio Trends
Analyzing Nintendo’s PE Ratio over time provides valuable context for interpreting the current figure. The average historical PE Ratio for NTDOY over the past decade stands at 33.98. With the current PE Ratio at 41.93, we observe a 12.24% increase above this historical average. Examining both quarterly and annual data reveals the fluctuations and trends in investor sentiment and market perception of Nintendo’s earnings potential.
Quarterly and Annual PE Ratio Fluctuations
Over the last ten years, spanning 40 quarters, NTDOY’s PE Ratio has experienced significant swings. The highest point was recorded in March 2018, reaching a notable 317.96. Conversely, the lowest point occurred in March 2017, plunging to -1963.07, likely reflecting unusual financial circumstances during that period. These extremes highlight the volatility and the range within which Nintendo’s PE Ratio has operated.
| Year | PE Ratio | Change |
|---|---|---|
| 2024 | 19.48 | 41.03% |
| 2023 | 13.82 | -9.35% |
| 2022 | 15.24 | -0.57% |
| 2021 | 15.33 | -20.02% |
| 2020 | 19.16 | -3.01% |
| 2019 | 19.76 | -50.99% |
| 2018 | 40.32 | 33.25% |
| 2017 | 30.26 | -74.02% |
| 2016 | 116.45 | 132.89% |
| 2015 | 50.00 | -174.87% |
This table showcases the annual PE Ratio for Nintendo, offering a year-by-year view of its valuation relative to earnings. The “Change” column indicates the percentage change from the previous year, illustrating the dynamic nature of investor confidence and market conditions affecting NTDOY’s stock.
Analyzing this historical data, we observe a maximum annual increase of 132.89% and a maximum annual PE Ratio reaching 116.45, contrasted with a minimum annual increase of -174.87% and a minimum annual PE Ratio of 13.82. These figures emphasize the wide spectrum of PE Ratio values Nintendo has experienced, influenced by factors ranging from successful product launches to broader economic trends.
NTDOY Average PE Ratio: A Long-Term Perspective
To further contextualize the current PE Ratio, examining Nintendo’s average PE Ratio over different periods provides a smoother, long-term perspective, mitigating the impact of short-term fluctuations.
| Average Period | Average PE Ratio |
|---|---|
| 3-year avg | 16.18 |
| 5-year avg | 16.61 |
| 10-year avg | 33.98 |
The current PE Ratio of 41.93 is notably higher than the 3-year and 5-year averages, which stand at 16.18 and 16.61, respectively. It is also above the 10-year average of 33.98. This comparison suggests that, based on historical averages, NTDOY’s stock might be trading at a premium compared to its earnings. However, it’s essential to consider that average PE ratios can be influenced by outliers and may not always reflect current market conditions or future growth potential accurately.
NTDOY PE Ratio Compared to Industry Peers (ntdoy compare)
A crucial aspect of valuation analysis is comparing a company’s PE Ratio to its peers within the same industry. This comparative approach provides insights into whether a stock is overvalued or undervalued relative to similar companies. Below is a comparison of Nintendo’s PE Ratio with key competitors in the gaming and entertainment sector:
| Company | PE Ratio | Market Cap (USD Billion) |
|---|---|---|
| Square Enix Holdings Co., Ltd. (KNAMF) | 0 | $5.08B |
| Capcom Co., Ltd. (SQNXF) | 43.73 | $10.51B |
| mixi, Inc. (CCOEY) | 50.30 | $1.28B |
| Electronic Arts Inc. (EA) | 33.28 | $33.72B |
| Activision Blizzard, Inc. (ATVI) | 32.32 | $74.29B |
| Roblox Corporation (RBLX) | 48.80 | $43.78B |
| NetEase, Inc. (NTES) | -47.16 | $64.42B |
| Take-Two Interactive Software, Inc. (TTWO) | 18.06 | $36.85B |
| Playtika Holding Corp. (PLTK) | -10.02 | $2.77B |
| Ubisoft Entertainment SA (UBSFF) | 12.77 | $1.52B |
| CD Projekt S.A. (OTGLY) | -26.52 | $5.71B |
| Sega Sammy Holdings Inc. (SGAMY) | 51.71 | $4.18B |
| (Unknown Ticker) | 16.26 | $0 |
Compared to its peers, Nintendo’s PE Ratio of 41.93 falls within the mid-range. It is lower than companies like mixi, Inc. (50.30), Roblox Corporation (48.80), and Sega Sammy Holdings Inc. (51.71), but higher than Electronic Arts Inc. (33.28), Activision Blizzard, Inc. (32.32), Take-Two Interactive Software, Inc. (18.06), and Ubisoft Entertainment SA (12.77). Some peers exhibit negative PE ratios (NetEase, Playtika, CD Projekt), indicating losses or suppressed earnings in their recent financial performance, making direct PE ratio comparison less meaningful. Square Enix Holdings Co., Ltd. shows a PE Ratio of 0, which may indicate break-even earnings or data unavailability.
This peer comparison suggests that while Nintendo’s PE Ratio is not the highest in the industry, it’s also not among the lowest. The varied PE ratios within the peer group highlight the diverse financial performance and market valuations within the gaming sector.
Utilizing PE Ratio for NTDOY Investment Decisions
The PE Ratio is a valuable tool in assessing stock valuation, but it should not be used in isolation. For Nintendo (NTDOY), a PE Ratio of 41.93, when compared to its historical averages and some peers, suggests a potentially higher valuation relative to earnings. However, investors should consider several other factors:
- Growth Prospects: Nintendo’s future earnings growth potential is crucial. Upcoming game releases, new console cycles, and expansion into new markets can justify a higher PE Ratio if strong earnings growth is anticipated.
- Industry Context: The gaming industry’s overall valuation trends and growth forecasts play a role. If the sector is experiencing growth and positive investor sentiment, higher PE ratios may be justified across the board.
- Financial Health: Nintendo’s balance sheet strength, cash flow, and profitability metrics provide a broader picture of its financial stability and investment attractiveness.
- Qualitative Factors: Brand strength, competitive positioning, and management quality are important qualitative aspects that can influence valuation and are not directly captured by PE Ratio.
For investors seeking to delve deeper into NTDOY’s valuation and compare it with other stocks based on various financial metrics, utilizing stock screening tools can be highly beneficial. Custom stock screeners allow for the comparison of companies like Nintendo across a wide range of financial and key metrics, facilitating more informed investment decisions.
Building a custom stock screener using tools like Wisesheets in spreadsheets (Excel or Google Sheets) enables investors to filter and compare thousands of companies based on user-defined criteria. This approach empowers investors to identify potentially undervalued or overvalued stocks, considering metrics beyond just the PE Ratio.
Conclusion
Nintendo’s current PE Ratio of 41.93 is above its historical averages and sits in the mid-range compared to its industry peers. While this might suggest a relatively rich valuation based on earnings, it’s crucial to consider Nintendo’s growth prospects, industry dynamics, and overall financial health. A comprehensive investment analysis should incorporate PE Ratio alongside other financial metrics and qualitative factors to form a well-rounded perspective on NTDOY’s investment potential. Tools for custom stock screening can further enhance this analysis, enabling detailed comparisons and informed decision-making in the dynamic stock market.
