What’s Next For Nintendo Stock After The Announcement of Its Next Zelda Game?

NTDOY: Nintendo Co Ltd ADR logo
NTDOY
Nintendo Co Ltd ADR

Nintendo stock (OTCMKTS: NTDOY) is up 5.8% in a week, while it has seen a 1.6% fall in a month, significantly outperforming the broader indices, with the S&P500 index rising 0.6% in a week but down 8.0% in a month. The recent rise For Nintendo can be attributed to its September 2022 event, in which it announced that it will release the next Zelda game – The Legend of Zelda: Tears of The Kingdom – on May 12, 2023. This was the biggest takeaway from the event, given that it is one of the most anticipated games after the massive success of the previous game – The Legend of Zelda: Breath of The Wild.  For perspective, Breath of The Wild is the fourth best-selling game for the Nintendo Switch console, with over 27 million copies sold since its launch in 2017. Breath of The Wild was also awarded Game of The Year in 2017. It has been half a decade since gamers have been waiting for the sequel to the Zelda game.

Now, the company’s handheld console – Switch – has also seen massive success, with 111 million units sold since its launch in 2017. The company is expected to launch a newer version of the Switch console, but the timing is unknown. It surely makes sense to launch it with its most anticipated title next year. Apart from the Zelda sequel, Nintendo announced several other titles, including Resident Evil Village, Just Dance 2023, and Fae Farm, among others, that will be launched over the coming months. [1]

Now that NTDOY stock has seen a fall of 2% in a month, will it continue its downward trajectory, or is a rise imminent? Going by historical performance, there is a higher chance of a rise for Nintendo stock over the next month. A move of -2% or more in a month for NTDOY has occurred 843 times in the past ten years. Of those instances, 454 resulted in NTDOY stock rising over the subsequent one-month period (twenty-one trading days). This historical pattern reflects 454 of 843 or a 54% chance of a rise in NTDOY stock over the next month. See our analysis of Nintendo Stock Chance of Rise for more details.

Calculation of ‘Event Probability‘ and ‘Chance of Rise‘ using the last ten years’ data

  • After moving 5.8% or more over five days, the stock rose on 47% of the occasions in the next five days.
  • After moving 2.5% or more over ten days, the stock rose in the next ten days on 54% of the occasions
  • After moving -1.6% or more over a twenty-one-day period, the stock rose on 54% of the occasions in the next twenty-one days.
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This pattern suggests a higher chance of a fall in NTDOY stock over the next five days but a higher chance of a rise over the next ten days and the next month.

While Nintendo stock looks like it can see higher levels, the Covid-19 crisis has created many pricing discontinuities, which can offer attractive trading opportunities. For example, you’ll be surprised by how counter-intuitive the stock valuation is for Take-Two Interactive vs. Avago Technologies.

What if you’re looking for a more balanced portfolio instead? Our high-quality portfolio and multi-strategy portfolio have beaten the market consistently since the end of 2016.

 Returns Sep 2022
MTD [1]
2022
YTD [1]
2017-22
Total [2]
 NTDOY Return 4% -9% 104%
 S&P 500 Return 0% -17% 76%
 Trefis Multi-Strategy Portfolio -1% -16% 232%

[1] Month-to-date and year-to-date as of 9/14/2022
[2] Cumulative total returns since the end of 2016

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Notes:
  1. Nintendo Direct, Sep 13, 2022 []