Before Aion blew up large, looking at the 3Q of 2008, NCsoft had a trailing twelve month P/E of 29.6 meaning the price of the stock was 29.6 times the amount of earnings over the last twelve months. Nothing new had come out recently. Earnings had been down every quarter over that period. Aion was a big unknown. Stock price at the time Daewoo issued their report on NCsoft, the stock was at 44,000 with a twelve month target price of 60,000.
In 3Q of 2011, just before the peak the stock reached, NCsoft had a TTM P/E of 52.5, which is why I was saying the stock was insanely overpriced. At the time of this Daewoo report, the stock price was 347,000 with a target price of 600,000 (?!?!). Can we say irrational exuberance. Knew you could.
Now using those two P/E numbers to bound the stock price using the current TTM would put the price between 102,800 and 182,200. So not a surprise the stock is meandering about right in the middle. It's not the best of times, it's not the worse of times.
And considering how dismal 4Q was last year it's likely that those two numbers will go up by 40-50% at a minimum. So unless their costs spiraled out of control or sales collapsed since 3Q, I'm expecting the stock to rebound back up to around 200,000 (149,000-264,000). It may not be all at once but for those who are living vicariously through every NCsoft stock price drop, brace yourselves.
And if for some reason Daewoo is actually right about the fourth quarter, expect the stock to break 250,000 again.