nanarchy said:
When you look at shareprice/marketcap you need to also take into account things like P/E which show how much sentiment/future growth is built into the company. Currently Nintendo sits on a PE of 38 while Sony is on 12. Personally I think this makes Nintendo a little overvalued or at least a much higher risk share as the future growth is already built into the shareprice, any hiccups would see a major drop. Sony's price however is probably fair. |
Yes, agreed. Both earnings and sentiment are important in valuing a company, and the high P/E shows that market sentiment is that Nintendo will continue to see growth. The point I was trying to make (perhaps poorly), is by valuing Nintendo so highly, investors are clearly not expecting the Switch to decline any time soon.