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Matthew started his finance career working as an investment banking analyst for Falcon Capital Partners, a healthcare IT boutique, before moving on to  work for Raymond James  Financial, Inc in their specialty finance coverage group in Atlanta. Matthew then started in a role in corporate development at Babcock & Wilcox before moving to a corporate development associate role with Caesars Entertainment Corporation where he currently is. Matthew provides support to Caesars'  M&A  processes including evaluating inbound teasers/ CIMs  to identify possible acquisition targets, due diligence, constructing  financial models , corporate valuation, and interacting with potential acquisition targets.

Matthew has a Bachelor of Science in Accounting and Business Administration and a Bachelor of Arts in German from University of North Carolina.

Josh has extensive experience private equity, business development, and investment banking. Josh started his career working as an investment banking  analyst for Barclays  before transitioning to a private equity role Neuberger Berman. Currently, Josh is an Associate in the Strategic Finance Group of Accordion Partners, a  management consulting  firm which advises on, executes, and implements value creation initiatives and 100 day plans for Private Equity-backed companies and their financial sponsors.

Josh graduated Magna Cum Laude from the University of Maryland, College Park with a Bachelor of Science in Finance and is currently an  MBA  candidate at Duke University Fuqua School of Business with a concentration in Corporate Strategy.

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Stock Valuation.

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Presentation on theme: "Stock Valuation."— Presentation transcript:

Stock Valuation P.V. Viswanath. 2 Key Concepts and Skills Understand how stock prices depend on future dividends and dividend growth Be able to compute.

© 2003 The McGraw-Hill Companies, Inc. All rights reserved. Stock Valuation Chapter Eight.

Copyright © 2008 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin 0 Chapter 7 Equity Markets and Stock Valuation.

Stock Valuation 0 8.  While we value the bonds assuming ½, 1 years time difference between coupon payments, in reality the bond is traded every day.

Stock Valuation Chapter 9 Copyright © 2010 by the McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin.

McGraw-Hill/Irwin Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved. Stock Valuation Chapter 9 (8)

McGraw-Hill/IrwinCopyright © 2007 by The McGraw-Hill Companies, Inc. All rights reserved. Stock Valuation Chapter 6.

Chapter Outline Common Stock Valuation Common Stock Features

Cash Flows for Stockholders

Stock Valuation. Key Concepts and Skills Understand how stock prices depend on future dividends and dividend growth Be able to compute stock prices using.

1 Chapter 8 Stocks, Stock Valuation, and Stock Market Equilibrium Stocks, Stock Valuation, and Stock Market Equilibrium.

Chapter 8 Stock Valuation McGraw-Hill/Irwin Copyright © 2010 by The McGraw-Hill Companies, Inc. All rights reserved.

McGraw-Hill/Irwin Copyright © 2011 by the McGraw-Hill Companies, Inc. All rights reserved.

McGraw-Hill © 2004 The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin Equity Markets and Stock Valuation Chapter 7.

McGraw-Hill/Irwin Copyright © 2008 by The McGraw-Hill Companies, Inc. All rights reserved. 8 Stock Valuation.

1 Chapter 8 Stock Valuation Copyright © 2012 by McGraw-Hill Education. All rights reserved.

Copyright © 2011 by the McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin.

Stock Valuation P.V. Viswanath. 2 Key Concepts and Skills  Understand how stock prices depend on future dividends and dividend growth  Be able to compute.

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Valuation is the analytical process of determining the current or projected worth of an asset or a company. There are many techniques used for doing a valuation. An analyst placing a value on a company looks at the business’s management, the composition of its capital structure, the prospect of future earnings, and the market value of its assets, among other metrics.

Fundamental analysis is often employed in valuation, although several other methods may be employed such as the capital asset pricing model or the dividend discount model.

A valuation can be useful when trying to determine the fair value of a security, which is determined by what a buyer is willing to pay a seller, assuming both parties enter the transaction willingly. When a security trades on an exchange, buyers and sellers determine the market value of a stock or bond.

The concept of intrinsic value, however, refers to the perceived value of a security based on future earnings or some other company attribute unrelated to the market price of a security. That’s where valuation comes into play. Analysts do a valuation to determine whether a company or asset is overvalued or undervalued by the market.

Absolute valuation models attempt to find the intrinsic or true value of an investment based only on fundamentals. Looking at fundamentals simply means you would only focus on such things as dividends, cash flow, and the growth rate for a single company, and not worry about any other companies. Valuation models that fall into this category include the dividend discount model, discounted cash flow model, residual income model, and asset-based model.

Relative valuation models, in contrast, operate by comparing the company in question to other similar companies. These methods involve calculating multiples and ratios, such as the price-to-earnings multiple, and comparing them to the multiples of similar companies.

Unfortunately, there is no one method that’s best suited for every situation. Each stock is different, and each industry or sector has unique characteristics that may require multiple valuation methods. At the same time, different valuation methods will produce different values for the same underlying asset or company which may lead analysts to employ the technique that provides the most favorable output.

This template will be useful to financial analysts and economists. You can use the slides in this template to prepare a report on the value of a security or a company that your corporation plans to acquire.

This template can also be used by startups when preparing for a meeting with investors. You can use the slides in this template when preparing information about the market value of your company’s assets and projected growth after the launch of a new product.

Valuation Template is a professional and modern template that contains four stylish and fully editable slides. If necessary, you can change all elements of the slide in accordance with your corporate requirements. This template will be useful for startups, company executives, analysts and economists. The Valuation Template will complement your presentations seamlessly and will be a great addition to your collection of professional presentations.

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Growth Stocks. Value Stocks. What Do Those Labels Mean?

Using index funds to make bets on these key categories is hazardous, our columnist says.

By Jeff Sommer

Jeff Sommer writes Strategies , a weekly column on markets, finance and the economy.

Growth and value are basic categories in stock investing. They are so widely used that you might assume that they mean something specific.

To an extent, they do. Growth stocks promise to deliver a lot of earnings in the future but often deliver less than other stocks right now. Value stocks are priced well below what their advocates consider to be their real worth. They aren’t usually trendy.

But beyond those broad concepts, watch out. If you look under the hood, you will find that what’s called growth or value in leading stock indexes can be wildly different, and can change year by year.

The markets have undergone major shifts since the start of the pandemic, with stocks falling in and out of favor as inflation, rising interest rates, and wars in the Middle East and Eastern Europe jolted asset prices with remarkable rapidity.

Making bets on a particular style or sector is a risky undertaking in a time like this, especially if you don’t know what stocks are in your fund. At the very least, it’s critical that you understand what you’re buying.

Shifting Definitions

As I reported last year, S&P Dow Jones Indices, an influential market analysis firm, made some startling moves in its growth and value indexes. Basing its decision entirely on the hard judgments of its mathematical model, S&P included fossil-fuel energy companies like Exxon Mobil and Chevron — more frequently thought of as value stocks — in its growth indexes for 2023.

At the same time, it concluded that technology companies like Alphabet (Google), Amazon, Meta (Facebook) and Microsoft were no longer “pure growth” stocks.

These changes reflected the market turmoil of 2022. High-growth tech stocks fell in sales and share price, while energy prices soared after Russia invaded Ukraine — making fossil-fuel companies look for a time like fast-growing stocks, despite constraints imposed by global warming.

Unlike other index providers, S&P Dow Jones Indices includes price momentum as an important factor in distinguishing between growth and value. “We publish our methodology transparently on our website,” Hamish Preston, director of U.S. equities for S&P Dow Jones Indices, said in an interview. “Those changes are just what happened, given the methodology.”

Then, in 2024, S&P Dow Jones Indices largely reversed itself, moving fossil-fuel companies back to its value index and tech stocks back to growth. It did so because the market in 2023 had shifted closer to traditional patterns — with an artificial intelligence boom propelling tech companies and falling energy prices blunting the appeal of fossil-fuel company stocks, at least for a while.

In an email, Mr. Preston detailed some of the changes made in his firm’s growth and value indexes at the end of 2023. Nearly one-third of the stocks in the S&P 500 value index shifted, the most since 2009, and turnover in its S&P 500 growth index was nearly as great.

S&P 500 Growth’s exposure to information technology stocks increased 9.4 percentage points to 47.2 percent. At the same time, the S&P 500 Value’s exposure to the sector declined 10.5 points to 8.3 percent. S&P shifted Microsoft, Amazon and Meta 100 percent to growth, while moving Exxon and Chevron fully to value.

If you hadn’t carefully examined funds that are based on the S&P indexes, you would not have known that the profile of your funds had substantially changed.

The Consequences

When the S&P 500 started to rise last autumn, giant high-growth tech stocks were among the leaders. Suppose that instead of owning the entire S&P 500 through an index fund, you wanted to hold only high-tech growth stocks. You could have gone to the trouble of buying individual shares. But a less time-consuming way of capturing the market’s rise would have been to buy an index fund that focused on big growth stocks.

Alas, it wasn’t that simple. Vanguard is an index fund leader, and it offers three large-capitalization index funds with a growth label: Vanguard Growth, Vanguard Russell 1000 Growth and Vanguard S&P 500 Growth. All had different returns, mainly because they tracked different indexes and contained different stocks.

Vanguard Growth is the biggest of the three, and it has the lowest cost, 0.04 percent. It tracks the CRSP US Large Cap Growth Index — which is run by an academic entity, the Center for Research in Security Prices, an affiliate of the University of Chicago.

“That’s the Vanguard branded fund,” said Michael W. Nolan, chief spokesman for investments at Vanguard. It doesn’t veer much year to year in its definitions, nor does its sister fund, Vanguard Value.

The value side at Vanguard is parallel to growth. There are three funds: the Vanguard Value fund as well as Vanguard Russell 1000 Value and Vanguard S&P 500 Value. Vanguard Value and Growth are the company’s flagships for these investing styles. It offers other growth and value index funds because some advisers prefer them, Mr. Nolan said.

The Russell 1000 funds are offshoots of the Russell 1000 stock index. The composition of its value and growth indexes has been much more stable than S&P’s, largely because it doesn’t include price momentum as a factor, Catherine Yoshimoto, director of product management at FTSE Russell, said in an interview.

IShares and other index fund providers have similar funds, tracking a range of growth and value indexes.

A Simpler Way

I view the entire effort of selecting growth and value funds, and making bets that one investing style will outperform another, as questionable at best. Even if you pick the right overall approach in a given moment, the fickle market can shift at any time. Add uncertainty about what your fund may contain, and you’re leaving a lot to chance.

You may be better off as an index fund investor if you forget about growth and value distinctions and track the entire stock and bond markets without trying to pick stocks or investing styles.

Vanguard, iShares, State Street, Fidelity, Schwab and a host of other companies offer broad low-cost funds. Vanguard pioneered this plain-vanilla, total-market approach with index funds with clear labels, like Vanguard Total Stock Market, Vanguard Total Bond Market and Vanguard Total International Stock Market. They are the underlying funds in the target-date series of funds that are the default option in many 401(k)s.

Investing gets much trickier when you deviate from this straightforward approach and start slicing up the markets, even in what may seem to be the simplest and most time-honored ways.

Growth investing and value investing both have long and distinguished histories. I studied value investing at Columbia Business School, where it has had a home for 100 years. Benjamin Graham, a pioneer in value investing, taught there. But practicing its precepts requires time, discipline and talent. You need to look company by company, stock by stock, bond by bond, carefully and laboriously.

Growth investing has eminent forebears, too. Peter Lynch , who ran Fidelity’s Magellan fund with spectacular results from 1977 to 1990, practiced a form of growth investing combined with fundamental analysis. His approach was sometimes called growth at a reasonable price.

Masters of these disciplines have managed to outperform the stock market — at least some of the time. But most people don’t have the time or inclination, to say nothing of the knowledge or skill, to beat the market for long.

That’s why index funds that capture the entire market make sense. Slicing the market into categories with index funds is a form of active investing. It may work some of the time, but it can backfire on you, especially if you don’t know what your fund contains.

Instead, keep it simple, and invest as broadly and as cheaply as possible. If you veer from those principles, you had better be prepared to do your homework.

Jeff Sommer writes Strategies , a weekly column on markets, finance and the economy. More about Jeff Sommer

A Guide to Making Better Financial Moves

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Common Stock Valuation

Aug 27, 2014

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6. Common Stock Valuation. Common Stock Valuation. Our goal in this chapter is to examine the methods commonly used by financial analysts to assess the economic value of common stocks. These methods are grouped into three categories: Dividend discount models Residual Income models

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Presentation Transcript

6 Common Stock Valuation

Common Stock Valuation • Our goal in this chapter is to examine the methods commonly used by financial analysts to assess the economic value of common stocks. • These methods are grouped into three categories: • Dividend discount models • Residual Income models • Price ratio models

Security Analysis: Be Careful Out There • Fundamental analysis is a term for studying a company’s accounting statements and other financial and economic information to estimate the economic value of a company’s stock. • The basic idea is to identify “undervalued” stocks to buy and “overvalued” stocks to sell. • In practice however, such stocks may in fact be correctly priced for reasons not immediately apparent to the analyst.

The Dividend Discount Model • The Dividend Discount Model (DDM) is a method to estimate the value of a share of stock by discounting all expected future dividend payments. The basic DDM equation is: • In the DDM equation: • V(0) = the present value of all future dividends • D(t) = the dividend to be paid t years from now • k = the appropriate risk-adjusted discount rate

Example: The Dividend Discount Model • Suppose that a stock will pay three annual dividends of $200 per year, and the appropriate risk-adjusted discount rate, k, is 8%. • In this case, what is the value of the stock today?

The Dividend Discount Model: the Constant Growth Rate Model • Assume that the dividends will grow at a constant growth rate g. The dividend next period (t + 1) is: • For constant dividend growth, the DDM formula becomes:

Example: The Constant Growth Rate Model • Suppose the current dividend is $10, the dividend growth rate is 10%, there will be 20 yearly dividends, and the appropriate discount rate is 8%. • What is the value of the stock, based on the constant growth rate model?

The Dividend Discount Model:the Constant Perpetual Growth Model. • Assuming that the dividends will growforever at a constant growth rate g. • For constant perpetual dividend growth, the DDM formula becomes:

Example:Constant Perpetual Growth Model • Think about the electric utility industry. • In mid-2005, the dividend paid by the utility company, American Electric Power (AEP), was $1.40. • Using D(0)=$1.40, k = 7.3%, and g = 1.5%, calculate an estimated value for DTE. Note: the actual mid-2005 stock price of AEP was $38.80. What are the possible explanations for the difference?

The Dividend Discount Model:Estimating the Growth Rate • The growth rate in dividends (g) can be estimated in a number of ways: • Using the company’s historical average growth rate. • Using an industry median or average growth rate. • Using the sustainable growth rate.

The Historical Average Growth Rate • Suppose the Kiwi Company paid the following dividends: • 2000: $1.50 2003: $1.80 • 2001: $1.70 2004: $2.00 • 2002: $1.75 2005: $2.20 • The spreadsheet below shows how to estimate historical average growth rates, using arithmetic and geometric averages.

The Sustainable Growth Rate • Return on Equity (ROE) = Net Income / Equity • Payout Ratio = Proportion of earnings paid out as dividends • Retention Ratio = Proportion of earnings retained for investment

Example: Calculating and Using the Sustainable Growth Rate • In 2005, American Electric Power (AEP) had an ROE of 14.59%, projected earnings per share of $2.94, and a per-share dividend of $1.40. What was AEP’s: • Retention rate? • Sustainable growth rate? • Payout ratio = $1.40 / $2.94 = .476 • So, retention ratio = 1 – .476 = .524 or 52.4% • Therefore, AEP’s sustainable growth rate = .1459  52.4% = 7.645%

Example: Calculating and Using the Sustainable Growth Rate, Cont. • What is the value of AEP stock, using the perpetual growth model, and a discount rate of 7.3%? • Recall the actual mid-2005 stock price of AEP was $38.80. • Clearly, there is something wrong because we have a negative price. • What causes this negative price? • Suppose the discount rate is appropriate. What can we say about g?

The Two-Stage Dividend Growth Model • The two-stage dividend growth model assumes that a firm will initially grow at a rate g1 for T years, and thereafter grow at a rate g2 < k during a perpetual second stage of growth. • The Two-Stage Dividend Growth Model formula is:

Using the Two-Stage Dividend Growth Model, I. • Although the formula looks complicated, think of it as two parts: • Part 1 is the present value of the first T dividends (it is the same formula we used for the constant growth model). • Part 2 is the present value of all subsequent dividends. • So, suppose MissMolly.com has a current dividend of D(0) = $5, which is expected to “shrink” at the rate g1 - -10% for 5 years, but grow at the rate g2 = 4% forever. • With a discount rate of k = 10%, what is the present value of the stock?

Using the Two-Stage Dividend Growth Model, II. • The total value of $46.03 is the sum of a $14.25 present value of the first five dividends, plus a $31.78 present value of all subsequent dividends.

Example: Using the DDM to Value a Firm Experiencing “Supernormal” Growth, I. • Chain Reaction, Inc., has been growing at a phenomenal rate of 30% per year. • You believe that this rate will last for only three more years. • Then, you think the rate will drop to 10% per year. • Total dividends just paid were $5 million. • The required rate of return is 20%. • What is the total value of Chain Reaction, Inc.?

Example: Using the DDM to Value a Firm Experiencing “Supernormal” Growth, II. • First, calculate the total dividends over the “supernormal” growth period: • Using the long run growth rate, g, the value of all the shares at Time 3 can be calculated as: V(3) = [D(3) x (1 + g)] / (k – g) V(3) = [$10.985 x 1.10] / (0.20 – 0.10) = $120.835

Example: Using the DDM to Value a Firm Experiencing “Supernormal” Growth, III. • Therefore, to determine the present value of the firm today, we need the present value of $120.835 and the present value of the dividends paid in the first 3 years:

Discount Rates for Dividend Discount Models • The discount rate for a stock can be estimated using the capital asset pricing model (CAPM). • We will discuss the CAPM in a later chapter. • However, we can estimate the discount rate for a stock using this formula: Discount rate = time value of money + risk premium = U.S. T-bill rate + (stock beta x stock market risk premium)

Observations on Dividend Discount Models, I. Constant Perpetual Growth Model: • Simple to compute • Not usable for firms that do not pay dividends • Not usable when g > k • Is sensitive to the choice of g and k • k and g may be difficult to estimate accurately. • Constant perpetual growth is often an unrealistic assumption.

Observations on Dividend Discount Models, II. Two-Stage Dividend Growth Model: • More realistic in that it accounts for two stages of growth • Usable when g > k in the first stage • Not usable for firms that do not pay dividends • Is sensitive to the choice of g and k • k and g may be difficult to estimate accurately.

Residual Income Model (RIM), I. • We have valued only companies that pay dividends. • But, there are many companies that do not pay dividends. • What about them? • It turns out that there is an elegant way to value these companies, too. • The model is called the Residual Income Model (RIM). • Major Assumption (known as the Clean Surplus Relationship, or CSR): The change in book value per share is equal to earnings per share minus dividends.

Residual Income Model (RIM), II. • Inputs needed: • Earnings per share at time 0, EPS0 • Book value per share at time 0, B0 • Earnings growth rate, g • Discount rate, k • There are two equivalent formulas for the Residual Income Model: BTW, it turns out that the RIM is mathematically the same as the constant perpetual growth model.

Using the Residual Income Model. • National Beverage Corporation (FIZ) • It is July 1, 2005—shares are selling in the market for $7.98. • Using the RIM: • EPS0=$0.47 • DIV = 0 • B0=$4.271 • g = 0.09 • K = .103 • What can we sayabout the marketprice of FIZ?

The Growth of FIZ • Using the information from the previous slide, what growth rate results in a FIZ price of $7.98?

Price Ratio Analysis, I. • Price-earnings ratio (P/E ratio) • Current stock price divided by annual earnings per share (EPS) • Earnings yield • Inverse of the P/E ratio: earnings divided by price (E/P) • High-P/E stocks are often referred to as growth stocks, while low-P/E stocks are often referred to as value stocks.

Price Ratio Analysis, II. • Price-cash flow ratio (P/CF ratio) • Current stock price divided by current cash flow per share • In this context, cash flow is usually taken to be net income plus depreciation. • Most analysts agree that in examining a company’s financial performance, cash flow can be more informative than net income. • Earnings and cash flows that are far from each other may be a signal of poor quality earnings.

Price Ratio Analysis, III. • Price-sales ratio (P/S ratio) • Current stock price divided by annual sales per share • A high P/S ratio suggests high sales growth, while a low P/S ratio suggests sluggish sales growth. • Price-book ratio (P/B ratio) • Market value of a company’s common stock divided by its book (accounting) value of equity • A ratio bigger than 1.0 indicates that the firm is creating value for its stockholders.

Price/Earnings Analysis, Intel Corp. Intel Corp (INTC) - Earnings (P/E) Analysis 5-year average P/E ratio 37.30 Current EPS$1.16 EPS growth rate 17.5% Expected stock price = historical P/E ratio  projected EPS $50.84 = 37.30  ($1.16  1.175) Mid-2005 stock price = $26.50

Price/Cash Flow Analysis, Intel Corp. Intel Corp (INTC) - Cash Flow (P/CF) Analysis 5-year average P/CF ratio 19.75 Current CFPS $1.94 CFPS growth rate 13.50% Expected stock price = historical P/CF ratio  projected CFPS $43.49 = 19.75  ($1.94  1.135) Mid-2005 stock price = $26.50

Price/Sales Analysis, Intel Corp. Intel Corp (INTC) - Sales (P/S) Analysis 5-year average P/S ratio 6.77 Current SPS $5.47 SPS growth rate 10.50% Expected stock price = historical P/S ratio  projected SPS $40.92 = 6.77  ($5.47  1.105) Mid-2005 stock price = $26.50

An Analysis of theMcGraw-Hill Company The next few slides contain a financial analysis of the McGraw-Hill Company, using data from the Value Line Investment Survey.

The McGraw-Hill Company Analysis, I.

The McGraw-Hill Company Analysis, II.

The McGraw-Hill Company Analysis, III. • Based on the CAPM, k = 3.1% + (.80  9%) = 10.3% • Retention ratio = 1 – $.66/$2.65 = .751 • Sustainable g = .751  23% = 17.27% • Because g > k, the constant growth rate model cannot be used. (We would get a value of -$11.10 per share)

The McGraw-Hill Company Analysis (Using the Residual Income Model, I) • Let’s assume that “today” is January 1, 2005, g = 7%, and k = 10.3%. • Using the Value Line Investment Survey (VL), we can fill in column two (VL) of the table below. • We use column one and our growth assumption for column three (CSR) of the table below.

The McGraw-Hill Company Analysis (Using the Residual Income Model, II) • Using the CSR assumption: • Using Value Line numbers for EPS1=$2.65, B1=$11.50B0=$9.45; and using the actual change in book value instead of an estimate of the new book value, (i.e., B1-B0 is = B0 x k) Stock price at the time = $47.04.What can we say?

The McGraw-Hill Company Analysis, IV. Quick calculations used: P/CF = P/E  EPS/CFPS P/S = P/E  EPS/SPS

The McGraw-Hill Company Analysis, V.

Useful Internet Sites • www.nyssa.org (the New York Society of Security Analysts) • www.aaii.com (the American Association of Individual Investors) • www.eva.com(Economic Value Added) • www.valueline.com (the home of the Value Line Investment Survey) • Websites for the companies analyzed in this chapter: • www.aep.com • www.americanexpress.com • www.pepsico.com • www.starbucks.com • www.sears.com • www.intel.com • www.disney.go.com • www.mcgraw-hill.com

Chapter Review, I. • Security Analysis: Be Careful Out There • The Dividend Discount Model • Constant Dividend Growth Rate Model • Constant Perpetual Growth • Applications of the Constant Perpetual Growth Model • The Sustainable Growth Rate

Chapter Review, II. • The Two-Stage Dividend Growth Model • Discount Rates for Dividend Discount Models • Observations on Dividend Discount Models • Residual Income Model (RIM) • Price Ratio Analysis • Price-Earnings Ratios • Price-Cash Flow Ratios • Price-Sales Ratios • Price-Book Ratios • Applications of Price Ratio Analysis • An Analysis of the McGraw-Hill Company

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• Entertainment

Capcom Full Year 2024 Earnings: Beats Expectations

Capcom ( TSE:9697 ) Full Year 2024 Results

Key financial results.

• Revenue: JP¥152.4b (up 21% from FY 2023).
• Net income: JP¥43.4b (up 18% from FY 2023).
• Profit margin: 28% (in line with FY 2023).
• EPS: JP¥207 (up from JP¥87.36 in FY 2023).

All figures shown in the chart above are for the trailing 12 month (TTM) period

Capcom Revenues and Earnings Beat Expectations

Revenue exceeded analyst estimates by 4.7%. Earnings per share (EPS) also surpassed analyst estimates by 102%.

Looking ahead, revenue is forecast to grow 5.6% p.a. on average during the next 3 years, compared to a 4.3% growth forecast for the Entertainment industry in Japan.

Performance of the Japanese Entertainment industry.

The company's shares are up 2.9% from a week ago.

Balance Sheet Analysis

While earnings are important, another area to consider is the balance sheet. We have a graphic representation of Capcom's balance sheet and an in-depth analysis of the company's financial position.

Valuation is complex, but we're helping make it simple.

Find out whether Capcom is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com. 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.

About TSE:9697

Capcom Co., Ltd. plans, develops, manufactures, sells, and distributes home video games, online games, mobile games, and arcade games in Japan and internationally.

Flawless balance sheet with proven track record and pays a dividend.

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Market insights.