Nintendo (OTC: NTDOY) delivered robust growth in sales and profits during the pandemic, and that has sent the stock to multiyear highs. A combination of shelter-in-place dynamics and new game releases was a perfect storm for the classic gaming brand. While the Sony PlayStation 5 and Microsoft Xbox Series X will present serious competition this holiday season, there are three reasons Nintendo stock still has upside for investors both near term and in the years ahead.
Stock prices can do anything in the short term, but long term, there is a tight correlation between share performance and earnings growth. Not only did Nintendo's net sales more than double year over year in the fiscal first quarter (ended June 30), but net profit per share surged 541% year over year, bringing Nintendo's trailing 12-month net profits to 348.5 billion yen ($3.2 billion).
Image source: Getty Images.