Fact based stock research
NEXON (TSE:3659)

JP3758190007

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For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".

Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".

Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.

Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.

(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).

(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.

NEXON stock research in summary

company.nexon.co.jp

ANALYSIS: With an Obermatt Combined Rank of 37 (worse than 63% compared with investment alternatives), NEXON (Interactive Home Entertainment, Japan) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of NEXON are a good value (attractively priced) with a consolidated Value Rank of 51 (better than 51% of alternatives), are safely financed (Safety Rank of 76, which means low debt burdens), but show below-average growth (Growth Rank of 17). ...read more

RECOMMENDATION: A Combined Rank of 37, is a hold recommendation based on NEXON's financial characteristics. As the company NEXON's key financial metrics exhibit good value (Obermatt Value Rank of 51) but low growth (Obermatt Growth Rank of 17) while being safely financed (Obermatt Safety Rank of 76), it may be a safer investment because companies with low debt can better withstand times of crises. Yet the good value, better than 51% of comparable companies, may also indicate that the company's future is challenging. If you believe that low growth is temporary or just due to a specific current event, you may conclude that the good value of the stock provides an attractive investment opportunity and the downside is limited due to below-average financing risks. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more

Latest Obermatt Ranks


360° View^new
Sentiment Rank^new
Value Rank	51
Growth Rank	17
Safety Rank	76
Combined Rank	37

Country	Japan
Industry	Interactive Home Entertainment
Index
Size class	X-Large

19-Dec-2024. Stock data may be delayed. Log in or sign up to get the most recent research.

Further information

Multiple opinions. One number.

Analysts rarely agree on a stock’s future. So, who do you believe? Obermatt translates those collective views into a single Sentiment Rank. That plus the financial ranks give you the ultimate 360° View. Sign up to access them.

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Review the performance ranks of the individual metrics that form each investment strategy.

Research History: NEXON

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	78	41	26	51
GROWTH
GROWTH	13	69	85	17
SAFETY
SAFETY	100	82	81	76
SENTIMENT
SENTIMENT	n/a	54	86	^new
360° VIEW
360° VIEW	n/a	80	89	^new

Most recent update of the stock research: 19-Dec-2024. Financial reporting date used for calculating ranks: 30-Sep-2024. Stock research history is based on the Obermatt Method. The higher the rank, the better NEXON is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	78	41	26	51
GROWTH
GROWTH	13	69	85	17
SAFETY
SAFETY	100	82	81	76
COMBINED
COMBINED	75	77	78	37

Last update of combined financial performance: 19-Dec-2024. Stock analysis on combined financial performance: The higher the rank of NEXON the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 51 (better than 51% compared with alternatives), NEXON shares are more attractively priced than the majority of comparable stocks. The Value Rank is based on consolidating four value indicators, with half of the indicators below and half above average for NEXON. Price-to-Profit (also referred to as price-earnings, P/E) is 82 which means that the stock price compared with what market professionals expect for future profits is lower than for 82% of comparable companies, indicating a good value concerning NEXON's profit levels. The same is valid for Price-to-Book Capital (also referred to as market-to-book ratio) with a Price-to-Book Rank of 62, which means that the stock price is lower as regards to invested capital than for 62% of comparable investments. On the other hand, Price-to-Sales is less favorable than for 63% of alternatives (only 37% of peers have an even less favorable ratio). The same is valid for dividend yield, which is lower than for 57% of comparable companies, making the stock more expensive compared with the company's expected dividend payouts. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 51, is a buy recommendation based on NEXON's stock price compared with the company's operational size and dividend yields. This is a puzzling picture, because it means that profits are high while dividends are low. Since the stock price is low compared with invested capital but high concerning expected revenues, the company has more invested capital than peers for generating the same amount of revenue. Since profits are higher, it could be a "cash cow" situation (using the classic Boston Consulting Group or BCG matrix naming convention) where the company is on a downward trend, still living from the profits of past products. As the company pays low dividends, it may harbor the opinion that a turnaround is possible, and it rather invests the cash than distribute it to shareholders through dividends, thus sealing the company's fate early. Any investment optimism should only be a buy trigger once thorough research is completed. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision, which is especially important in this case, as the financial indicators are inconclusive. ...read more

VALUE METRICS	2021	2022	2023	2024
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	34	32	19	37
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	81	67	59	82
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	71	67	46	62
DIVIDEND YIELD
DIVIDEND YIELD	65	33	31	43
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	78	41	26	51

Last update of Value Rank: 19-Dec-2024. Stock analysis on value ratios: The higher the rank, the lower the value ratio of NEXON; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 17 (better than 17% compared with alternatives), NEXON shows one of the most restricted growth dynamics in its industry. There is little momentum in this company. The Growth Rank is based on consolidating four value indicators, with three out of four metrics below average for NEXON. While Profit Growth has a good rank of 71, as professionals currently expect the company to grow its profits more than 71% of its competitors, all other growth indicators are below market averages. Sales Growth has a rank of 20, which means that currently professionals expect the company to grow less than 80% of its competitors, while Capital Growth has a rank of 36 and Stock Returns have been below market median, with a rank of 11 (89% of alternative investments were better). ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 17, is a sell recommendation for growth and momentum investors. While revenue growth and capital growth are good growth momentum indicators, profit is less reliable, because profits may increase due to cost-cutting measures which typically indicate negative growth momentum. "You can save a dollar only once" is the saying about such situations. Growth Investors should look at company priorities closely if they are interested in growth, because the increase in profits is not usually an indicator of growth, and stock prices have been below market, too. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case, especially since the growth performance is limited here. ...read more

GROWTH METRICS	2021	2022	2023	2024
REVENUE GROWTH
REVENUE GROWTH	33	70	67	20
PROFIT GROWTH
PROFIT GROWTH	100	89	56	71
CAPITAL GROWTH
CAPITAL GROWTH	n/a	59	91	36
STOCK RETURNS
STOCK RETURNS	17	15	45	11
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	13	69	85	17

Last update of Growth Rank: 19-Dec-2024. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of NEXON.

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 76 (better than 76% compared with alternatives) for 2024, the company NEXON has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of NEXON is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, where all three are above average for NEXON. Leverage is at 70, meaning the company has a below-average debt-to-equity ratio. It has less debt than 70% of its competitors. Refinancing is at a rank of 78, meaning that the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 78% of its competitors. Finally, Liquidity is also good at a rank of 70, which means that the company generates more profit to service its debt than 70% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 76 (better than 76% compared with alternatives), NEXON has a financing structure that is significantly safer than that of its competitors. These three positive financing indicators signal that the company is less likely to default on its debt obligations. However, it also means that its shareholder returns will be more modest if things go well. A low safety means fewer troubles in downtimes and less upside in good times. Investors may not have a debt issue with NEXON but they should also compare Obermatt’s Value, Growth, and Sentiment Ranks before making a decision. ...read more

SAFETY METRICS	2021	2022	2023	2024
LEVERAGE
LEVERAGE	92	71	77	70
REFINANCING
REFINANCING	65	80	68	78
LIQUIDITY
LIQUIDITY	100	78	73	70
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	100	82	81	76

Last update of Safety Rank: 19-Dec-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of NEXON and the more cash is available to service its debt.

Sentiment Metrics in Detail

SENTIMENT	2021	2022	2023	2024
ANALYST OPINIONS
ANALYST OPINIONS	n/a	75	87	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	50	78	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	14	80	^new
MARKET PULSE
MARKET PULSE	n/a	57	45	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	54	86	^new

Last update of Sentiment Rank: 19-Dec-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for NEXON.
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