NTDOY - Why Is Nintendo Stock So Cheap?
2023-06-27 06:09:57 ET
There may not be a company that is loved so much by consumers but disliked by the investment community more than Nintendo (OTC: NTDOY) . Fans of Mario, Zelda, and other characters eagerly anticipate every Nintendo product announcement, a level of enthusiasm only perhaps matched by Apple 's faithful customer base.
And yet, even with this valuable intellectual property (IP) and rabid fans, Nintendo shares have historically traded at an earnings multiple below the market average. Today, its price-to-earnings (P/E) ratio is 14.5, while the S&P 500 trades at a P/E of 25. Disney -- the most comparable entertainment company to Nintendo -- trades at a nosebleed P/E of 39.
Why does Nintendo have such a cheap earnings ratio? Does that make the stock a buy at these prices? Let's investigate.
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Why Is Nintendo Stock So Cheap?