Nintendo stock is booming after Labo announcement: prices may overtake ATH in 2018

In 2015 Nintendo was on the brink of collapse, as the Wii U failed to replicate the great success of its predecessor (Wii), and with about 11 million units sold world wide in its entire lifespan Wii U is officially the worst selling home console of Nintendo. The value of the company declined fast, and from 2007 peak Nintendo’s stock (OTCMKTS: NTDOY) lost in 6 years over 80 percent of value, with the investors losing faith in the company competitiveness.

What Nintendo did back then was a true masterpiece that should be mentioned in any management book. Nintendo in 2015 quickly rebuilt a new strategy to bring itself back into profitability, without sacrificing the pillars that distinguish the company of Kyoto from other competitors: quality, innovation and creativity. On March 2015 Nintendo announced a partnership with DeNa to jointly develop titles for the mobile sector, and on April 2016 announced NX, the new console that will later be known as Nintendo Switch.

The skepticism around the company vanished when the Switch was unveiled to the public in October 2016, convincing the critics, the analysts and the players around the world. The 2017 has been a fantastic year for Nintendo, with the Switch becoming the fastest selling console in North America of all times.

Nintendo stock weekly chart updated to 19 January 2018. Credit: Technician/TBGlobalist

Skies are now crystal blue over Kyoto, and Nintendo’s stock rebounded from 2015 low and prices soared over 300 percent in two years, while the company’s market capitalization overtaked Sony on June 2017. The stock uptrend, moreover, may continue in the next months and in following years, as Nintendo keeps delighting the public with new killer applications.

Nintendo Labo will help the stock to sustain the uptrend in 2018

On Wednesday 17 January, during Nintendo direct 2018, the Japanese company announced Labo, a new line of interactive toys represented by 25 sheets of cardboard that players can turn into playable objects. The concept of Labo looks brilliant and in the video game industry is a very rare thing, which shows the hidden capabilities of Nintendo Switch. Labo is a tangible proof that in 2017 Nintendo was not just sitting and basking in the great success of Switch, but the company was also preparing to maintain its momentum for 2018.

Pre-order your Nintendo LABO – Variety Kit

Pre-order your Nintendo LABO – Robot Kit

Nintendo’s stock soared by 4 percent for two consecutive days, as investors think the gadget will help to boost the Switch’s sales for 2018.

The technical analysis confirms the good moment for the stock and now there are few obstacles for the prices to reach the 2007 peak.

Nintendo daily chart
Nintendo daily chart updated to 19 January 2018. Credit:Technician/TBGlobalist

The breakaway gap opened in 2016 is a strong upside sign, and usually this always marks the start of a new trend, which for now has been confirmed by the events, as the stock recently close a pullback on 2008 low. Nintendo Labo announcement helped the stock to breakup the 2017 high, and now prices are free to reach the target at $60, with few obstacles separating the stock for its ATH.

At the moment, given the great success of Switch phenomena, we don’t see anything that should prevent Nintendo’s sales to perform well in 2018 and increase the company’s revenues for the fiscal year. The stock uptrend will continue in 2018 and is highly possible that the prices will reach and overtake the all time high during the course of the year. 

 

 

 

Nintendo Switch’s sales push stock to 2008 levels

Nintendo can forget the Wii U’s colossal flop and celebrate 2017 as one of the best year ever, as the newborn Nintendo Switch’s sales soar over 10 million units.

Nintendo Switch is selling as fast as Sony Playstation 4 and is about to reach its old brother Nintendo Wii U, which sold 13,56 million units in its four-year life span. The Japanese company predicts to sell over 16 million Switch by the end of March 2018 and Nintendo plans to produce 25-30 million Switch in the next fiscal year (April 2018 through March 2019).

Nintendo’s stock ( XTKS:7974 ) is on 2008 levels, coming from a rally started on June 2016 with Pokemon Go phenomena. Technically speaking, prices made a throwback on 2008 lows after the 2010 high’s breakout, and in the short-mid term the stock is still in a up-trend (see picture below). However, much will depend on Nintendo Switch’s sales as well as Nintendo plans to replace Nintendo 3DS.

Nintendo stock
Nintendo stock on a monthly chart, updated to 12th December 2017 – Technician