Nintendo Co., Ltd. Recorded A 11% Miss On Revenue: Analysts Are Revisiting Their Models

It's shaping up to be a tough period for Nintendo Co., Ltd. (TSE:7974), which a week ago released some disappointing third-quarter results that could have a notable impact on how the market views the stock. It looks like a weak result overall, with both revenues and earnings falling well short of analyst predictions. Revenues of JP¥433b missed by 11%, and statutory earnings per share of JP¥110 fell short of forecasts by 8.9%. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

View our latest analysis for Nintendo

Taking into account the latest results, the current consensus from Nintendo's 22 analysts is for revenues of JP¥1.86t in 2026. This would reflect a huge 51% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to leap 25% to JP¥342. Before this earnings report, the analysts had been forecasting revenues of JP¥1.80t and earnings per share (EPS) of JP¥340 in 2026. So it looks like there's been no major change in sentiment following the latest results, although the analysts have made a modest lift to to revenue forecasts.

The analysts increased their price target 5.8% to JP¥10,004, perhaps signalling that higher revenues are a strong leading indicator for Nintendo's valuation. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values Nintendo at JP¥12,400 per share, while the most bearish prices it at JP¥6,100. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. The analysts are definitely expecting Nintendo's growth to accelerate, with the forecast 39% annualised growth to the end of 2026 ranking favourably alongside historical growth of 0.3% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 13% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Nintendo is expected to grow much faster than its industry.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Nintendo going out to 2027, and you can see them free on our platform here..

Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.