- Square Enix reported its 1Q operating income at 9.02 billion yen, missing estimates of 9.16 billion yen and showing a decline of 17% year-over-year.
- The company’s net income for the quarter was 4.80 billion yen, which is a 55% decrease year-over-year, falling short of the estimated 6.88 billion yen.
- Net sales were reported at 59.28 billion yen, a 15% drop compared to the same period last year, and below the estimated 67.13 billion yen.
- For the 2026 forecast, Square Enix maintains an operating income projection of 41.00 billion yen, slightly under the estimated 41.72 billion yen.
- The forecast for net income in 2026 remains at 28.70 billion yen, which is lower than the estimated 30.86 billion yen.
- Projected net sales for 2026 stand at 280.00 billion yen, not reaching the estimate of 305.28 billion yen.
- Market sentiment for Square Enix shows 1 buy recommendation, 10 hold recommendations, and 8 sell recommendations.
Square Enix Holdings on Smartkarma
Analyst coverage on Square Enix Holdings by Mark Chadwick on Smartkarma indicates a positive outlook for the company. In the report titled “Square Enix (9684) | Turnaround in Motion,” Chadwick highlights the company’s focus on high-quality titles and improved financials leading to potential stock re-rating. With a shift towards higher-margin, high-quality titles, Square Enix aims to stabilize earnings and spur growth. The report also mentions activist involvement, pushing for capital returns and governance reform to unlock shareholder value.
In another insight by Mark Chadwick titled “Japan Activist Watch | Square Enix, DaitoTrust, Iriso & INES,” activist investors are targeting Square Enix for capital inefficiency, while also critiquing Daito Trust for excessive cash reserves. The report highlights the involvement of 3D Investment Partners and Dalton Investments in Square Enix, addressing capital inefficiency and poor margin profiles. Additionally, the report notes potential value plays in Iriso Electronic and INES for small cap funds, as both companies trade below book value.
A look at Square Enix Holdings Smart Scores
| Factor | Score | Magnitude |
|---|---|---|
| Value | 2 | |
| Dividend | 2 | |
| Growth | 2 | |
| Resilience | 4 | |
| Momentum | 5 | |
| OVERALL SMART SCORE | 3.0 |
Smart Score is a compound score for the Company indicating its overall outlook. It is derived by taking an equally weighted average of underlying Factor scores computed by Smartkarma
Based on the Smartkarma Smart Scores, Square Enix Holdings shows a mixed outlook for the long term. While the company presents moderate scores in Value, Dividend, and Growth factors, it stands out in terms of Resilience and Momentum. With a high Resilience score of 4 and a top-notch Momentum score of 5, Square Enix Holdings seems well-positioned to weather challenges and capitalize on positive market trends.
Square Enix Holdings, a developer and publisher of popular entertainment software such as the Dragon Quest and Final Fantasy series, continues to diversify its offerings by venturing into areas like publishing books and selling character goods. This strategic expansion coupled with a strong focus on Resilience and Momentum factors suggest a promising future for Square Enix Holdings in the dynamic digital entertainment industry.
Disclaimer: This article by Smartkarma is general in nature and 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. Note that our articles may not factor in the latest price-sensitive company announcements or qualitative material.
While all reasonable care has been taken in the preparation, Smartkarma makes no assurance about the accuracy of any generated data or content. All content is indicative only and should be independently checked for accuracy and confirmed before use. Smartkarma accepts no responsibility for any loss or damage caused as a result of any inaccuracy or error within the Lab online tools or generated data.
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