Gravity Co (GRVY) AI Stock Analysis

• Market Cap: $447.93M
• Dividend Yield: N/A
• Average Volume (3M): 11.20K
• Price to Earnings (P/E): 7.5
• Beta (1Y): 0.78
• Revenue Growth: -33.83%
• EPS Growth: -38.30%
• Country: US
• Employees: 414
• Sector: Communication Services
• Sector Strength: 79
• Industry: Electronic Gaming & Multimedia
• EPS (TTM): 2.19
• Shares Outstanding: 6,948,900
• 10 Day Avg. Volume: 11,444
• 30 Day Avg. Volume: 11,202
• PEG Ratio: 0.16
• Price to Book (P/B): 1.07
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 3.70
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0

• Rating: 78 Outperform
• Price Target: ―

Gravity Co's strong financial performance is the most significant factor driving the stock's positive outlook, supported by robust revenue growth and effective cash management. The stock's technical indicators suggest moderate momentum, while its low P/E ratio points to potential undervaluation. The overall score reflects a solid investment potential with some room for growth, though the lack of dividend yield is a minor drawback for income investors.

Gravity Co Business Overview & Revenue Model

Company Description

Gravity Co., Ltd. develops and publishes online and mobile games in South Korea, Taiwan, Thailand, and Japan. The company offers a massively multiplayer online role-playing game, including Ragnarok Online, Dragonica, Ragnarok Online II, and Ragnarok Prequel II. Its mobile games portfolio includes Ragnarok M: Eternal Love; Ragnarok Origin; Ragnarok X: Next Generation; the Labyrinth of Ragnarok; Ragnarok Poring Merge; Tera Classic; Ragnarok: The Lost Memories; Sadako M; NBA: Rise To Stardom; Milkmaid Of The Milky Way; and Paladog Tactics. The company also provides console games, such as Ragnarok DS for Nintendo DS; Ragnarok: The Princess of Light and Darkness for PlayStation Portable; Ragnarok Odyssey for PlayStation Vita; Double Dragon II for Xbox 360; Ragnarok Odyssey Ace for PlayStation Vita and PlayStation 3; and GRANDIA HD Collection for Nintendo Switch. In addition, it offers games for IPTV, including Pororo: The Little Penguin; and markets dolls, stationery, food, and other character-based merchandises, as well as game manuals, monthly magazines, and other publications. Further, the company provides system development and maintenance services, as well as system integration services to third parties. As of December 31, 2021, it owned 156 registered domain names. The company was incorporated in 2000 and is headquartered in Seoul, South Korea. Gravity Co., Ltd. is a subsidiary of GungHo Online Entertainment, Inc.

How the Company Makes Money

Gravity Co generates revenue through a combination of game sales, in-game purchases, and subscription services associated with its gaming titles. A significant portion of its income stems from 'Ragnarok Online' and its related franchises, which offer players the option to purchase virtual goods, premium content, and customizations within the game. Additionally, Gravity Co collaborates with various international partners who license its games and distribute them in different regions, thereby earning licensing and royalty fees. The company also benefits from advertising and promotional partnerships that leverage its gaming platforms for marketing purposes.

Gravity Co Financial Statement Overview

Summary

Gravity Co exhibits a strong financial performance across all verticals. The company has achieved significant revenue and profit growth, maintains a stable and low-leverage balance sheet, and demonstrates excellent cash flow management. These factors contribute to a positive outlook and position Gravity Co as financially sound and operationally efficient within the Interactive Multi-Media industry.

Income Statement

Gravity Co has demonstrated impressive revenue growth with a 56.44% increase from 2022 to 2023. The company maintains a strong gross profit margin of 33.15% and a net profit margin of 18.19% in 2023, indicating efficient cost management and profitability. The EBIT margin of 22.10% and EBITDA margin of 24.33% further highlight operational efficiency.

Balance Sheet

The balance sheet is robust with a low debt-to-equity ratio of 0.005, reflecting minimal leverage and high financial stability. A strong return on equity of 28.51% underscores the company's effective use of shareholder funds. The equity ratio of 80.12% indicates a strong capital structure with significant equity financing.

Cash Flow

The cash flow statement reveals a healthy free cash flow growth rate of 32.60% from 2022 to 2023. Operating cash flow to net income ratio of 1.00 demonstrates strong cash generation relative to net income, while the free cash flow to net income ratio of 0.96 indicates efficient cash management.

Breakdown
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
516.65B	500.85B	725.52B	463.62B	413.94B	405.95B
	Gross Profit
197.43B	193.94B	240.56B	196.25B	189.77B	166.91B
	EBIT
95.86B	85.38B	160.37B	104.84B	97.56B	89.47B
	EBITDA
99.81B	115.72B	176.52B	117.07B	101.99B	93.12B
	Net Income Common Stockholders
83.40B	84.92B	132.02B	83.16B	65.95B	62.70B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
519.88B	559.80B	465.74B	340.25B	247.70B	182.45B
	Total Assets
624.34B	686.46B	578.18B	444.09B	327.53B	265.37B
	Total Debt
0.00	0.00	2.34B	3.06B	5.12B	3.25B
	Net Debt
-200.68B	-228.90B	-184.08B	-166.82B	-93.98B	-107.39B
	Total Liabilities
91.31B	118.10B	114.45B	113.91B	80.69B	88.02B
	Stockholders Equity
532.38B	567.67B	463.09B	329.53B	246.07B	176.91B
Cash Flow		Free Cash Flow
0.00	73.79B	126.63B	95.48B	69.97B	66.16B
	Operating Cash Flow
0.00	78.56B	132.43B	98.28B	74.18B	69.86B
	Investing Cash Flow
0.00	-47.03B	-116.58B	-22.34B	-82.47B	-36.05B
	Financing Cash Flow
0.00	-4.64B	-4.08B	-3.92B	-3.31B	-2.55B

Gravity Co Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 62.35
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GRVY, the sentiment is Negative. The current price of 62.35 is below the 20-day moving average (MA) of 64.49, above the 50-day MA of 61.98, and above the 200-day MA of 61.91, indicating a neutral trend. The MACD of 0.33 indicates Positive momentum. The RSI at 45.56 is Neutral, neither overbought nor oversold. The STOCH value of 33.43 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for GRVY.

Gravity Co Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
GRVY	78 Outperform	$447.93M	7.55	14.97%	―	-33.83%	-38.30%
Sector *	61 Neutral	$14.64B	5.81	-3.99%	6.03%	2.71%	-31.56%
NCTY		$113.17M	3.07	-22.85%	―	―	―
DDI	75 Outperform	$529.23M	3.44	13.91%	―	10.71%	21.74%
GDEV	70 Neutral	$399.04M	8.92		899.74%	-5.57%	―
PLTK	63 Neutral	$1.80B	12.48	-220.61%	8.33%	1.64%	-32.31%
MYPS	62 Neutral	$188.84M	―	-11.64%	―	-11.11%	-90.96%