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4 Strong Buy Video Game Stocks to Own in 2021

4 Strong Buy Video Game Stocks to Own in 2021

Posted On January 7, 2021 4:12 am
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It is no surprise that the video gaming industry fared well during the COVID-19 pandemic-ridden 2020. Remote lifestyle and social distancing policies, combined with rising cases of coronavirus daily, motivated people to remain indoors, making online gaming one of the top choices for entertainment. The gaming industry has not only recognized the growth potential these conditions illuminated, but has capitalized on it by launching new hardware and consoles. With the launch of latest versions of PlayStation and Xbox, the overall gaming industry is estimated to have increased 9.3% year-over-year to $159.30 billion in 2020.

While global coronavirus vaccine deployment and fiscal stimulus have led to a pullback in the majority of tech and software stocks that benefited immensely from the pandemic, rising coronavirus cases globally and rising concerns about the second strain will likely lead to a trend reversal soon. Because the global economy is on the threshold of another lockdown, with japan considering declaring a state of emergency, the video gaming industry probably has plenty of upside in the upcoming months.

As the demand for video games continues to accelerate globally, companies including Nintendo Co., Ltd. (NTDOY – Get Rating), Activision Blizzard, Inc. (ATVI – Get Rating), Electronic Arts Inc. (EA – Get Rating) and Take-Two Interactive Software, Inc. (TTWO – Get Rating) have been developing an assortment of new video games and upgrades for some of the most popular games to broaden their customer bases. Most of these companies are witnessing a rise in their customer engagement numbers, which we think should boost their revenue and earnings growth.

Nintendo Co., Ltd. (NTDOY – Get Rating)

Based in Japan, NTDOY is one of the most popular companies in the entertainment products and gaming consoles industry. The company is known for its home console hardware systems, related software, and Japanese style playing cards trump and carta.

Yesterday, NTDOY announced the acquisition of Canadian video games creator Next Level Games Inc. The acquisition will allow NTDOY to leverage Next Level Games’ decades of software experience in its console systems to ramp up sales.

The company’s net sales have increased 73.3% year-over-year to ¥769.52 billion for the six months ended September 30, 2020. Operating profits have risen 209.3% from the year-ago value to ¥291.42 billion, while earnings per share has grown 243.6% from the same period last year to ¥1,789.10.

The consensus revenue estimate of $15.43 billion for the fiscal year ending March 31, 2021 indicates a 52.3% rise year-over-year. The company has an impressive revenue surprise history as well; it beat the Street Revenue estimates in three of the trailing four quarters.

NTDOY has gained more than…

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