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SONY Stock Rises 11.8% YTD: Will the Upward Trend Continue?
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Sony Group Corporation (SONY - Free Report) is witnessing healthy momentum this year so far. Shares of the company have gained 11.8% year to date compared with the sub-industry’s growth of 11%.
The company designs, manufactures and sells several consumer and industrial electronic equipment. Additionally, Sony is active in the production, acquisition and distribution of motion pictures and television programming, along with the operation of television and digital networks.
Image Source: Zacks Investment Research
Catalysts Behind the Price Surge
Let’s delve deeper to unearth the factors working in favor of this Zacks Rank #3 (Hold) stock.
The company’s performance is significantly benefiting from continued strength in the Game & Network Services segment (G&NS), its largest business segment. In the last reported quarter, revenues from this segment were up 28% year over year to ¥771.9 billion. The company sold 3.3 million units of Play Station 5. The company continues to expect to sell more than 25 million units of PlayStation 5 in the current year.
The company is also investing in research and development to capitalize on the lucrative opportunity presented by live services games and the sale of add-ons for titles. The company expects the market for add-on style games to become a $19 billion opportunity in 2026.
The Music business segment is likely to benefit from higher recorded music and music publishing sales from paid subscription streaming services. Apart from this, frequent product launches and strategic collaborations bode well. In June, the company announced its partnership with SQUARE ENIX for its latest game — FINAL FANTASY XVI.
SONY’s 2024 and 2025 revenues are expected to rise 2.9% and 13.6% year over year, respectively. The company now expects 2024 revenues of ¥12,200 billion compared with the earlier guidance of ¥11,500 billion. The top-line performance is expected to be driven by strengthening momentum in GN&S, Music, and Entertainment, Technology & Services segment sales.
SONY outpaced estimates in all the trailing four quarters, delivering an earnings surprise of 38.2%, on average.
However, the company’s Pictures segment is expected to suffer due to delayed release dates for some theatrical releases in Motion Pictures and deliveries of television series in Television Productions. The Imaging & Sensing Solutions segment is likely to bear the brunt of decreasing unit sales of image sensors for mobile products.
The Zacks Consensus Estimate for Woodward’s fiscal 2023 earnings per share (EPS) has increased 15.9% in the past 60 days to $4.15.
WWD’s long-term earnings growth rate is 13.5%. Shares of WWD have gained 29.3% in the past year.
The Zacks Consensus Estimate for Aspen Technology’s fiscal 2024 EPS has increased 5.8% in the past 60 days to $6.58.
Aspen Technology’s long-term earnings growth rate is 17.1%. Shares of AZPN have declined 5% in the past year.
The Zacks Consensus Estimate for Badger Meter’s 2023 EPS has increased 6.3% in the past 60 days to $2.86.
Badger Meter’s earnings beat the Zacks Consensus Estimate in all the last four quarters, the average being 6.7%. Shares of BMI have surged 57% in the past year.
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SONY Stock Rises 11.8% YTD: Will the Upward Trend Continue?
Sony Group Corporation (SONY - Free Report) is witnessing healthy momentum this year so far. Shares of the company have gained 11.8% year to date compared with the sub-industry’s growth of 11%.
The company designs, manufactures and sells several consumer and industrial electronic equipment. Additionally, Sony is active in the production, acquisition and distribution of motion pictures and television programming, along with the operation of television and digital networks.
Image Source: Zacks Investment Research
Catalysts Behind the Price Surge
Let’s delve deeper to unearth the factors working in favor of this Zacks Rank #3 (Hold) stock.
The company’s performance is significantly benefiting from continued strength in the Game & Network Services segment (G&NS), its largest business segment. In the last reported quarter, revenues from this segment were up 28% year over year to ¥771.9 billion. The company sold 3.3 million units of Play Station 5. The company continues to expect to sell more than 25 million units of PlayStation 5 in the current year.
The company is also investing in research and development to capitalize on the lucrative opportunity presented by live services games and the sale of add-ons for titles. The company expects the market for add-on style games to become a $19 billion opportunity in 2026.
The Music business segment is likely to benefit from higher recorded music and music publishing sales from paid subscription streaming services. Apart from this, frequent product launches and strategic collaborations bode well. In June, the company announced its partnership with SQUARE ENIX for its latest game — FINAL FANTASY XVI.
SONY’s 2024 and 2025 revenues are expected to rise 2.9% and 13.6% year over year, respectively. The company now expects 2024 revenues of ¥12,200 billion compared with the earlier guidance of ¥11,500 billion. The top-line performance is expected to be driven by strengthening momentum in GN&S, Music, and Entertainment, Technology & Services segment sales.
SONY outpaced estimates in all the trailing four quarters, delivering an earnings surprise of 38.2%, on average.
However, the company’s Pictures segment is expected to suffer due to delayed release dates for some theatrical releases in Motion Pictures and deliveries of television series in Television Productions. The Imaging & Sensing Solutions segment is likely to bear the brunt of decreasing unit sales of image sensors for mobile products.
Stocks to Consider
Some better-ranked stocks in the broader technology space are Woodward (WWD - Free Report) , Aspen Technology (AZPN - Free Report) and Badger Meter (BMI - Free Report) . Woodward and Aspen Technology presently sport a Zacks Rank #1 (Strong Buy), whereas Badger Meter currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Woodward’s fiscal 2023 earnings per share (EPS) has increased 15.9% in the past 60 days to $4.15.
WWD’s long-term earnings growth rate is 13.5%. Shares of WWD have gained 29.3% in the past year.
The Zacks Consensus Estimate for Aspen Technology’s fiscal 2024 EPS has increased 5.8% in the past 60 days to $6.58.
Aspen Technology’s long-term earnings growth rate is 17.1%. Shares of AZPN have declined 5% in the past year.
The Zacks Consensus Estimate for Badger Meter’s 2023 EPS has increased 6.3% in the past 60 days to $2.86.
Badger Meter’s earnings beat the Zacks Consensus Estimate in all the last four quarters, the average being 6.7%. Shares of BMI have surged 57% in the past year.