Wall Street can be very slow to give companies their due reward with a higher stock price, and that's to the advantage of an investor who keeps a long-term mindset. If you understand the opportunities ahead for a business, you're in a position to profit off the stock.
Here are two solid companies experiencing growing demand for their services that could spell outstanding returns for patient investors.
Image source: Carnival.
1. Carnival
Demand trends and the long-term outlook for the leading cruise operator look solid. Carnival (CCL +2.15%) continues to report strong financial results in 2025, showing that it is benefiting from higher ticket prices and robust demand. Carnival reported another record quarter, with fiscal Q2 revenue reaching $6.3 billion. This brings its trailing-12-month revenue to $25.4 billion, which surpasses its pre-pandemic level of $20.8 billion in fiscal 2019.
The stock price has more than doubled over the past three years, but Carnival could support more shareholder returns through improving margins. The shares currently trade at a forward price-to-earnings multiple of just 12.5, which is very cheap considering the strong growth it is reporting.
NYSE: CCL
Key Data Points
Carnival's adjusted net income exceeded the company's guidance, reaching $470 million, or $0.35 per share. Strong pricing power and lower costs are expected to push adjusted net income to $2.7 billion for the full year, up from last year's $1.9 billion.
Importantly, the upcoming launch of Celebration Key as a cruise destination point could drive profitable growth for the business that isn't reflected in the stock's modest earnings multiple. This exclusive destination in the Bahamas is strategically located close to the company's ports and is intended to lower fuel costs and generate healthy profits. Key attractions like water slides, entertainment, and restaurants should be a guest magnet, driving further upside to ticket prices and margins.
Wall Street is significantly underestimating this opportunity. Carnival is not just a cruise company anymore. Investments in exclusive destinations like Celebration Key can distinguish the Carnival brand and drive attractive returns for shareholders.
2. Nintendo
Nintendo's (NTDOY +5.85%) (NTDO.F +4.28%) stock has had its ups and downs in recent years, but if you had bought shares at the end of 2016, a few months before the Nintendo Switch launched, your investment would currently be up 338% -- outperforming the 172% return of the S&P 500.
OTC: NTDOY
Key Data Points
The video game industry is valued at $180 billion and has been growing for 50 years. Nintendo owns some of the most valuable intellectual property with exclusive franchises like Mario Bros and Zelda. Its Switch video game console has sold 152 million units, making it the most successful console in the company's history.
Nintendo Switch 2 just launched and sold more than 3.5 million units in the first four days after the June 5 release, breaking previous records.
Investors should note that consoles are low-margin sales. The real money is made on selling games, which carry higher profit margins. Nintendo forecasts 15 million unit sales for Switch 2 in the current fiscal year ending in March. But it expects to sell more games for Switch 2 than the original Switch sold in the first 10 months after launch.
Investors should expect to see Nintendo's profits decline in the near term, given the higher percentage of sales coming from hardware sales. However, the strong sales of Switch 2 set up a great run of software sales over the next few years, which should fuel strong earnings growth over the next few years.
The average price target among Wall Street analysts is currently $34.90, implying upside of 52% over the current $23 share price. These targets are usually estimates of where analysts believe the stock can trade in the next 12 months or so. With sales expected to double this year, this top gaming stock offers attractive upside potential over the next few years.
