Ariel Investments, LLC — Ariel Global Composite on Bandai Namco Holdings Inc.
Thesis
Bandai Namco gained as investors became more confident in its earnings recovery. Toys, collectibles and trading cards grew robustly, with the Gundam Card Game emerging as an international growth engine. Better repeat sales of existing video games, an improved release schedule and live entertainment broaden earnings sources. Ariel believes the IP-based model creates recurring monetization opportunities and that the market has not fully priced the early-stage recovery.
“the recovery remains in its early stages and the company's earnings potential is not yet fully reflected”
Key risks
- The earnings recovery remains in its early stages and could fall short of expectations.
- Momentum in trading cards, toys and collectibles may cool.
- The benefits of the upcoming game release slate and live entertainment offerings are not assured.