KT (KT) AI Stock Analysis

• Market Cap: $9.17B
• Dividend Yield: 2.98%
• Average Volume (3M): 1.39M
• Price to Earnings (P/E): 14.9
• Beta (1Y): 0.35
• Revenue Growth: -1.22%
• EPS Growth: -17.07%
• Country: US
• Employees: 18,617
• Sector: Communication Services
• Sector Strength: 96
• Industry: Telecommunications Services
• EPS (TTM): 1.01
• Shares Outstanding: 504,043,370
• 10 Day Avg. Volume: 1,451,490
• 30 Day Avg. Volume: 1,393,753
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.80
• Enterprise Value/Revenue: <0.01
• Enterprise Value/Gross Profit: <0.01
• Enterprise Value/Ebitda: <0.01
• 1Y Price Target: $22.00
• Price Target Upside: 8.48% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 0

• Rating: 72 Outperform
• Price Target: $22.00 ▲(8.48% Upside)

KT's strong earnings call performance, with significant revenue and profit growth, is a major positive factor. The financial performance shows solid revenue growth but highlights profitability challenges. Technical analysis indicates potential bearish momentum, while valuation remains attractive with a reasonable P/E ratio and a good dividend yield.

Positive Factors

Earnings

KT posted OP of W689bn in 1Q (+36% YoY), in line with consensus estimates, reflecting stable wireless revenue and growth from KT Cloud.

Growth Strategy

KT aims to secure a 22% market share in the domestic AX market by targeting W3tn in revenue, which is expected to provide long-term growth.

Shareholder Returns

KT announced a 1Q25 dividend per share (DPS) of W600, up 20% year-on-year, indicating confidence in earnings improvement.

Negative Factors

Profit Expectations

The adjusted operating profit, excluding one-off gains, is expected to grow 5% year-on-year, lower than previous expectations due to costs related to subsidiary establishment and ordinary wages.

KT Business Overview & Revenue Model

Company Description

KT Corporation provides integrated telecommunications and platform services in Korea and internationally. The company offers fixed-line telephone services, including local, domestic long-distance, international long-distance, and voice over Internet protocol telephone services, as well as interconnection services; broadband Internet access service and other Internet-related services; and data communication services, such as fixed-line and leased line services, as well as broadband Internet connection services. It also provides media and content services, including IPTV, satellite TV, digital music, e-commerce, online advertising consulting, and digital comics and novels services; and credit card processing and other financial services. In addition, the company offers information technology and network services, and satellite services; sells handsets and miscellaneous telecommunications equipment; develops and sells residential units and commercial real estate; and rents real estate properties. Further, it maintains public telephones; offers security, B2C and B2B, investment fund, software development and data processing, value added network, system integration and maintenance, mobile marketing, PCS distribution, satellite broadcasting, cloud system implementation, network installation and management, and data center development and related services. Additionally, the company is involved in the Internet banking ASP and security solutions, residential building development and supply, sports group management, technology business finance, software development and supply, submarine cable construction and maintenance, and trunk radio systems businesses. As of December 31, 2020, the company served approximately 22.3 million mobile subscribers and 8.8 million IPTV subscribers. The company was formerly known as Korea Telecom Corp. and changed its name to KT Corporation in March 2002. KT Corporation was founded in 1981 and is headquartered in Seongnam, South Korea.

How the Company Makes Money

KT generates revenue primarily through its telecommunications services, which include mobile and fixed-line voice services, broadband Internet, and data services. The company earns money from subscription fees for mobile plans and internet services, as well as from the sale of devices such as smartphones. Additionally, KT has diversified its revenue streams through its involvement in the IT services sector, offering cloud, big data, and IoT solutions to businesses. Significant partnerships with content providers and technology firms enhance its service offerings and create additional advertising and content revenue. Furthermore, KT invests in smart city projects and other infrastructure development, which can lead to long-term revenue generation through government contracts and public-private partnerships.

KT Financial Statement Overview

Summary

KT shows solid revenue growth and improved gross margins, but declining net and operational margins indicate profitability challenges. The balance sheet is stable with moderate leverage, though reduced ROE suggests profitability issues. Cash flow is improving, but significant capital expenditures impact free cash flow.

Income Statement

KT has shown a steady revenue growth trajectory with a 5.2% increase from 2022 to 2023. The gross profit margin improved from 32.5% in 2023 to 34.6% in 2024, indicating better cost management. However, the net profit margin has declined to 1.8% in 2024 from 3.8% in 2023, suggesting increased expenses or lower operational efficiency. EBIT and EBITDA margins also saw declines, highlighting potential challenges in operational profitability.

Balance Sheet

KT maintains a stable financial position with a moderate debt-to-equity ratio of 0.71 in 2024, reflecting balanced leverage. Stockholders' equity remains robust, supporting an equity ratio of 38.7%, indicating strong asset backing. However, the overall asset base slightly decreased, and the return on equity dropped to 2.9%, suggesting reduced profitability from shareholder investments.

Cash Flow

Free cash flow showed significant growth, rising by 62% from 2023 to 2024, indicating improved cash generation. However, the operating cash flow to net income ratio is high, at 10.8, pointing towards strong cash flow relative to earnings, which may indicate non-operational adjustments. Despite this, the free cash flow to net income ratio is lower, suggesting significant capital expenditures impacting cash flow.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	26.62T	26.43T	26.29T	25.65T	24.90T	24.10T
Gross Profit	13.34T	9.15T	9.87T	15.91T	14.86T	14.13T
EBITDA	4.72T	4.24T	5.53T	5.86T	5.73T	4.87T
Net Income	661.55B	470.29B	993.33B	1.26T	1.36T	700.89B
Balance Sheet
Total Assets	42.19T	42.00T	42.79T	40.99T	37.16T	33.66T
Cash, Cash Equivalents and Short-Term Investments	3.13T	5.06T	4.32T	3.77T	4.21T	3.84T
Total Debt	11.17T	11.58T	11.40T	10.01T	8.44T	7.32T
Total Liabilities	23.85T	24.04T	24.25T	22.58T	20.59T	18.11T
Stockholders Equity	18.34T	16.18T	16.73T	16.61T	14.98T	14.01T
Cash Flow
Free Cash Flow	511.80B	2.16T	1.33T	-390.07B	1.31T	1.02T
Operating Cash Flow	4.58T	5.07T	5.50T	3.60T	5.56T	4.74T
Investing Cash Flow	-4.06T	-2.85T	-4.62T	-4.84T	-5.14T	-3.76T
Financing Cash Flow	-562.02B	-1.39T	-452.79B	669.33B	-41.28B	-647.59B

KT Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 20.28
• 50DMA: Negative
• 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 KT, the sentiment is Positive. The current price of 20.28 is below the 20-day moving average (MA) of 20.40, below the 50-day MA of 20.61, and above the 200-day MA of 18.46, indicating a neutral trend. The MACD of -0.10 indicates Positive momentum. The RSI at 48.24 is Neutral, neither overbought nor oversold. The STOCH value of 34.32 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for KT.

KT Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TKC	81 Outperform	$4.79B	11.02	7.38%	5.84%	19.25%	5.69%
TIMB	79 Outperform	$10.07B	15.89	13.78%	5.72%	-7.99%	2.16%
TLK	74 Outperform	$18.99B	13.28	17.71%	6.63%	-5.13%	-5.90%
KT	72 Outperform	$9.17B	14.87	5.22%	2.98%	-1.22%	-17.07%
SKM	67 Neutral	$8.37B	11.60	8.49%	4.58%	-4.74%	-16.57%
Sector *	60 Neutral	$46.29B	4.07	-13.12%	4.12%	1.85%	-42.71%
TEO	56 Neutral	$3.61B	22.47	-0.27%	2.39%	3.89%	-107.44%