Intel stock extends gains after report of possible U.S. government stake
On Wednesday, Evercore ISI analyst Mark Mahaney announced a reduction in the price target for Webtoon Entertainment Inc (NASDAQ: WBTN), adjusting it to $23.00 from the previous target of $27.00, while maintaining an Outperform rating on the stock. Currently trading at $10.03, the stock has declined over 56% in the past year and appears undervalued according to InvestingPro Fair Value analysis. The adjustment follows Webtoon’s fourth-quarter earnings release, which marked the company’s third financial report since going public.
Webtoon disclosed preliminary fourth-quarter results on February 6, which hinted at lower-than-expected performance, and the finalized figures confirmed this trajectory. The company reported $353 million in quarterly revenue, a 5.6% year-over-year increase on a reported basis and a 10.4% increase when adjusted for foreign exchange impacts. With a gross profit margin of 25.06%, the company maintains healthy operational efficiency despite challenging market conditions. Webtoon’s significant exposure to currency fluctuations in the Korean and Japanese markets influenced these results.
Despite the revenue growth, total monthly active users (MAUs) saw a decline of 3.7% compared to the previous year, totaling 163 million. This decrease was partly intentional, as Webtoon is strategically transitioning its user base from the web to its app platform, where users tend to be more engaged and generate higher revenue. The MAUs were also affected by a government-imposed ban on Wattpad, a Webtoon service, in a country with restrictions on expression.
Mahaney highlighted several positive aspects of Webtoon’s performance, despite the lowered price target. The company achieved solid double-digit revenue growth when accounting for foreign exchange factors, and gross margins expanded by 140 basis points year-over-year to 23%, reflecting organic growth and efficiency gains in markets outside Korea. Additionally, Webtoon delivered its sixth consecutive quarter of positive EBITDA, indicating sustained profitability. InvestingPro analysis reveals strong financial health indicators, including a healthy current ratio of 2.49 and minimal debt exposure. For deeper insights into Webtoon’s financial health and growth prospects, investors can access the comprehensive Pro Research Report, available exclusively on InvestingPro.
In other recent news, Webtoon Entertainment Inc. reported a significant revenue increase in its fourth-quarter 2024 earnings, achieving $352.8 million, which marked a 10.4% growth on a constant currency basis. Despite this, the company faced a net loss, with earnings per share falling short of expectations at -$0.03. The full-year revenue reached $1.35 billion, representing a 5% increase, while adjusted EBITDA surged by 600% year-over-year to $67.9 million. Goldman Sachs recently adjusted its price target for Webtoon Entertainment from $25.00 to $15.00, maintaining a Buy rating, citing challenges such as foreign exchange volatility and strategic investments impacting the company’s short-term outlook.
The company has projected Q1 2025 revenue between $318 million and $328 million, indicating a modest growth rate of 1.7% to 4.8%. Adjusted EBITDA for the upcoming quarter is anticipated to range from $500,000 to $5.5 million. Webtoon Entertainment’s focus on expanding its presence in Japan has been a key driver, with Japan contributing nearly half of the total revenue. The company also highlighted a decline in total monthly active users by 3.7%, though engagement on its webcomic app increased by 6.7%. Webtoon is investing in user engagement and product improvements, aiming for long-term growth despite the short-term pressures outlined in its guidance.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.