Morgan Stanley analyst Matthew Cost maintained a Hold rating on WEBTOON Entertainment Inc (WBTN – Research Report) today and set a price target of $10.00.
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Matthew Cost has given his Hold rating due to a combination of factors influencing WEBTOON Entertainment Inc’s performance. The company reported strong first-quarter results with revenue and EBITDA surpassing expectations, primarily driven by growth in paid content, advertising, and IP adaptations. However, these positive financial outcomes were tempered by a decline in monthly active users (MAUs), particularly outside of Japan and Korea, due to external challenges such as the government ban in Turkey and search engine indexing issues.
Despite the solid financial performance, the guidance for the second quarter indicates potential challenges, with expected EBITDA falling below previous estimates. Additionally, while there are promising product improvements planned for the second half of 2025, the impact of these changes remains uncertain. As a result, Matthew Cost maintains a cautious outlook, reflected in the Hold rating, while monitoring key areas such as product development and user growth in North America and the rest of the world.