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Nintendo (TSE:7974) shares edged slightly lower today, slipping 1.4%. This move follows a relatively quiet trading session with no major company news released. Investors are left to weigh recent performance and valuation metrics.

See our latest analysis for Nintendo.

With Nintendo’s share price up more than 53% so far this year and an impressive 72% total shareholder return over the past twelve months, the recent slip feels more like a pause rather than a reversal. Momentum remains firmly on the company’s side after such a strong run, which suggests that investors are recalibrating expectations rather than abandoning the growth story.

If Nintendo’s recent surge has you curious about other opportunities, now is a great moment to explore fast growing stocks with high insider ownership.

But with shares trading near all-time highs, investors must now ask themselves whether Nintendo is undervalued after such gains, or if the market has already priced in every bit of its future potential.

Nintendo’s price-to-earnings ratio stands at 43.9x based on the latest close of ¥13,905, making it look expensive relative to both its peer group and the broader entertainment industry.

The price-to-earnings (P/E) ratio measures how much investors are willing to pay for each yen of current earnings. For a major entertainment company with widely recognized franchises, the P/E highlights how the market is weighing sustained profit generation and future growth prospects.

At 43.9x, investors are pricing Nintendo shares above the average for direct peers (35.8x) and notably above the JP Entertainment industry average (22.5x). This premium suggests that the market is confident in the company’s blockbuster franchises and its ability to post future earnings growth. However, it also sets a higher expectation for future performance. Compared to the estimated fair P/E of 46.7x, the current multiple is relatively close to what the market could reasonably support given Nintendo’s growth profile.

Explore the SWS fair ratio for Nintendo

Result: Price-to-Earnings of 43.9x (OVERVALUED)

However, risks remain, such as slowing profit growth or negative surprises in upcoming earnings, which could quickly test investor conviction in Nintendo’s rally.

Find out about the key risks to this Nintendo narrative.

While Nintendo looks expensive on earnings multiples, our SWS DCF model suggests a different story. According to this approach, the shares are currently trading well above our fair value estimate. This challenges the market’s optimism and raises the question: is sentiment running ahead of fundamentals?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Nintendo for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 877 undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match – so you never miss a potential opportunity.

If you see things differently or want to reach your own conclusions, you can dive into the numbers and craft your own take in just a few minutes using our tools. Do it your way.

A good starting point is our analysis highlighting 1 key reward investors are optimistic about regarding Nintendo.

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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.

Companies discussed in this article include 7974.T.

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

JFrog (FROG) captured market attention after releasing third quarter results that beat expectations on revenue and earnings. Cloud revenue jumped 50% year over year, which reflects broader adoption across enterprise customers.

See our latest analysis for JFrog.

Following these blowout results, JFrog’s share price has soared, jumping nearly 27% in a single day and delivering a 95% year-to-date share price return. That momentum reflects investor excitement about cloud growth, product innovation, and a brighter outlook, even as some long-term holders are still just above breakeven on a five-year total shareholder return basis.

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Yet with share prices approaching new highs and analyst targets, it raises an important question: is JFrog still undervalued after this rally, or has the market already priced in most of its future growth potential?

With JFrog last closing at $60, the most widely followed narrative puts fair value at $56.44, just under current levels. This sets up a lively debate about whether the rally has sprinted beyond reasonable expectations, given where growth and profitability might land in the coming years.

Continued product expansion and innovation targeting advanced security features, ML model lifecycle management, and new pricing packages position JFrog to raise contract values and further penetrate its growing addressable market. This supports both revenue acceleration and long-term earnings growth as digital transformation intensifies across industries.

Read the complete narrative.

Wondering which bold forecasts are fueling this premium valuation? The narrative builds a case on aggressive top-line growth and a dramatic turn-around in profitability. See the concrete assumptions that drive this punchy fair value and decide if they stack up to reality.

Result: Fair Value of $56.44 (OVERVALUED)

Have a read of the narrative in full and understand what’s behind the forecasts.

However, slowing cloud migration or rising competition in security could dampen JFrog’s growth outlook and challenge the assumptions behind these bullish forecasts.

Find out about the key risks to this JFrog narrative.

If you see things differently or want to follow your own hunches, it’s easy to dive in and craft your own take in just a few minutes. Do it your way

A great starting point for your JFrog research is our analysis highlighting 1 key reward and 2 important warning signs that could impact your investment decision.

Expand your investment playbook right now by targeting the boldest opportunities screeners reveal. These picks can give you an informed edge and help you avoid missing the next breakout star.

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.

Companies discussed in this article include FROG.

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