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KT Corporation (KT)
NYSE:KT

KT (KT) AI Stock Analysis

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KT

KT

(NYSE:KT)

Rating:71Outperform
Price Target:
$22.00
▲(3.77%Upside)
KT's overall stock score is driven primarily by solid financial performance and strong technical indicators. While revenue growth and cost management are positives, declining profitability margins pose risks. The stock's technicals suggest bullish momentum, supported by favorable moving averages and MACD. However, valuation concerns with a high P/E ratio temper the outlook.
Positive Factors
Earnings Improvement
KT announced a 1Q25 dividend per share (DPS) of W600, up 20% year-on-year, indicating confidence in earnings improvement.
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 share buyback/cancellation of W250bn as a part of the Value-Up program, which is expected to enhance shareholder value.
Negative Factors
Cost Challenges
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.
Operating Loss
KT registered an operating loss of W655bn in 4Q, largely in line with estimates, recognizing one-off labor restructuring costs of c.W1tn.

KT (KT) vs. SPDR S&P 500 ETF (SPY)

KT Business Overview & Revenue Model

Company DescriptionKT 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 MoneyKT Corporation generates revenue through multiple streams primarily centered around its telecommunications offerings. The company earns income from its mobile services, which include voice and data plans for both individual and corporate customers. Fixed-line services continue to be a significant revenue stream, providing traditional telephony and broadband internet connections. KT's IPTV services also contribute to its earnings, attracting subscribers with a diverse range of content. Additionally, KT engages in business-to-business (B2B) transactions by offering cloud services, data center operations, and IoT solutions, which are increasingly important as digital transformation progresses. Strategic partnerships in technology and media further enhance KT's revenue potential, allowing the company to leverage emerging technologies and expand its market reach.

KT Earnings Call Summary

Earnings Call Date:May 09, 2025
(Q4-2024)
|
% Change Since: 11.23%|
Next Earnings Date:Aug 06, 2025
Earnings Call Sentiment Neutral
The call presented a mixed outlook with record-breaking revenue and strategic partnerships highlighting future growth potential, but significant declines in operating profit and net profit due to workforce restructuring impacted overall performance negatively.
Q4-2024 Updates
Positive Updates
Record-Breaking Revenue
Consolidated revenue reported KRW 26,431.2 billion, a historical record since the company went public in 1998.
Strategic Partnership with Microsoft
Partnership with Microsoft to transform into an AICT company, focusing on structural profitability improvements.
Strong Performance in Cloud and Data Center
KT Cloud posted 15.5% year-over-year growth, supported by growing data center usage by global customers.
Increase in AI/IT Business Revenue
AI/IT business revenue increased 11.9% year-on-year, driven by AICC expansion and Thailand's LLM project.
Dividend Increase
Annual DPS increased from KRW 1,961 in 2023 to KRW 2,001 in FY '24.
Debt-to-Equity Ratio Improvement
Net debt-to-equity ratio dipped 1.9 percentage points year-over-year, reporting 37.7%.
Wireless Revenue Growth
Wireless revenue was up 1.3% year-on-year, with 5G subscriber count exceeding 10.4 million.
Negative Updates
Significant Decline in Operating Profit
Operating profit fell 50.9% year-on-year to KRW 809.5 billion due to one-off labor costs.
Decrease in Net Profit
Net profit fell 54.5% year-on-year to KRW 450.1 billion.
Decline in EBITDA
EBITDA was down 14.2% year-on-year to KRW 4,687.2 billion.
Increase in Operating Expenses
Operating expense was up 3.6% year-on-year, reporting KRW 25,621.7 billion, due to workforce revamping.
BC Card Revenue Decline
BC Card revenue was down 5.4% year-on-year to KRW 3,805.8 billion.
KT Skylife Revenue Decline
KT Skylife revenue was down 1.5% year-on-year to KRW 1,022.9 billion.
Content Subsidiary Revenue Fall
Content subsidiary saw its revenue fall by 13.6% year-on-year.
Company Guidance
During the call, KT provided guidance on several key metrics for fiscal year 2024. Consolidated revenue reached KRW 26,431.2 billion, marking a historical record since the company went public in 1998. However, operating profit fell by 50.9% year-on-year to KRW 809.5 billion, primarily due to one-off labor costs associated with workforce restructuring. Excluding these one-offs, the operating profit would have been KRW 1,811.8 billion, indicating a 9.8% increase year-on-year. The company's net profit declined by 54.5% year-on-year to KRW 450.1 billion, and EBITDA was down 14.2% year-on-year at KRW 4,687.2 billion. KT announced a consolidated revenue target of above KRW 28 trillion for the coming year and plans to enhance shareholder value through quarterly dividends and a share buyback and cancellation plan amounting to KRW 1 trillion until 2028.

KT Financial Statement Overview

Summary
KT shows solid revenue growth and improved cost management with higher gross margins. However, declining net and operational margins highlight profitability challenges. The balance sheet is stable, but reduced ROE points to profitability issues. Cash flow is improving, although capital expenditures impact free cash flow.
Income Statement
70
Positive
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
75
Positive
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
65
Positive
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.
BreakdownDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue26.43T26.29T25.65T24.90T24.10T
Gross Profit9.15T9.87T15.91T14.86T14.13T
EBITDA4.24T5.53T5.86T5.73T4.87T
Net Income470.29B993.33B1.26T1.36T700.89B
Balance Sheet
Total Assets42.00T42.79T40.99T37.16T33.66T
Cash, Cash Equivalents and Short-Term Investments5.06T4.32T3.77T4.21T3.84T
Total Debt11.58T11.40T10.01T8.44T7.32T
Total Liabilities24.04T24.25T22.58T20.59T18.11T
Stockholders Equity16.18T16.73T16.61T14.98T14.01T
Cash Flow
Free Cash Flow2.16T1.33T-390.07B1.31T1.02T
Operating Cash Flow5.07T5.50T3.60T5.56T4.74T
Investing Cash Flow-2.85T-4.62T-4.84T-5.14T-3.76T
Financing Cash Flow-1.39T-452.79B669.33B-41.28B-647.59B

KT Technical Analysis

Technical Analysis Sentiment
Positive
Last Price21.20
Price Trends
50DMA
19.61
Positive
100DMA
18.60
Positive
200DMA
17.34
Positive
Market Momentum
MACD
0.45
Negative
RSI
70.17
Negative
STOCH
83.30
Negative
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 21.2 is above the 20-day moving average (MA) of 20.16, above the 50-day MA of 19.61, and above the 200-day MA of 17.34, indicating a bullish trend. The MACD of 0.45 indicates Negative momentum. The RSI at 70.17 is Negative, neither overbought nor oversold. The STOCH value of 83.30 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for KT.

KT Risk Analysis

KT disclosed 26 risk factors in its most recent earnings report. KT reported the most risks in the "Legal & Regulatory" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

KT Peers Comparison

Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
TKTKC
77
Outperform
$5.37B12.756.74%3.86%14.09%-11.43%
SKSKM
74
Outperform
$8.95B10.1211.08%4.37%-4.13%4.96%
KTKT
71
Outperform
$10.22B23.073.81%2.88%-4.85%-43.88%
61
Neutral
$41.24B-0.79-14.21%3.80%2.39%-73.52%
TETEF
59
Neutral
$30.20B-0.55%4.50%-2.29%-182.68%
VOVOD
57
Neutral
$26.45B9.21-7.17%4.74%0.89%-494.16%
TETEO
55
Neutral
$3.88B19.043.99%-12.77%40.80%
* Communication Services Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
KT
KT
21.20
8.01
60.73%
SKM
Sk Telecom
23.58
2.87
13.86%
TEO
Telecom Argentina
9.05
2.23
32.70%
TEF
Telefonica
5.29
1.26
31.27%
TKC
Turkcell Iletisim
6.23
-1.57
-20.13%
VOD
Vodafone
10.78
2.15
24.91%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Jun 08, 2025