Last Updated: 19 Sep 2024
Executive Summary
WEBTOON Entertainment Inc. (WBTN) is a leading digital comics platform with a market capitalization of $1.34 billion. Despite strong revenue growth, the company is currently unprofitable, with an EBITDA of -$40.99 million and an EPS of -$1.18. Analysts maintain a positive outlook, with four "Buy" and three "Hold" ratings. The stock's current price of $10.51 is below its 52-week high of $25.66, providing a potential buying opportunity.
Company Overview
WEBTOON Entertainment is a global leader in digital comics, with over 72 million monthly active users. The company's platform hosts a diverse range of comics in various genres, including romance, action, comedy, and horror. WEBTOON has partnerships with major publishers and creators worldwide, including DC Comics, Marvel, and Kodansha.
Fundamental Analysis
Revenue: WEBTOON's revenue has grown steadily over the past few years, reaching $1.3 billion in the last twelve months. The company's revenue is primarily driven by subscriptions, in-app purchases, and advertising.
Profitability: WEBTOON is currently unprofitable, with an EBITDA margin of -11.5% and a net income margin of -0.115%. The company's high operating expenses, including content acquisition and marketing, have weighed on its profitability.
Balance Sheet: WEBTOON has a strong balance sheet with $1.19 billion in cash and equivalents and no long-term debt. The company's book value per share is $11.94.
Technical Analysis
Trend: WEBTOON's stock price has been in a downtrend since its peak in February 2022. The stock has broken below its 50-day and 200-day moving averages.
Support and Resistance: The stock has found support at the $10.22 level, which was its 52-week low. The next resistance level is at $16.6, which is the 50-day moving average.
Volume: Trading volume has been declining over the past few months, indicating a lack of interest in the stock.
Short Term Outlook
In the short term, WEBTOON's stock price is likely to remain volatile. The company's profitability challenges and the overall market sentiment will continue to weigh on the stock. However, the stock's low valuation and strong revenue growth could provide support.
Long Term Outlook
In the long term, WEBTOON has the potential to become a profitable and dominant player in the digital comics market. The company's large user base, diverse content library, and strong partnerships position it well for growth. However, the company will need to address its profitability challenges to unlock its full potential.
Analyst Recommendations
Analysts have a positive outlook on WEBTOON Entertainment Inc. Four analysts have issued "Buy" ratings, while three have issued "Hold" ratings. The average analyst target price is $26.71, implying a potential upside of over 150%.
