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WEBTOON Entertainment Inc (WBTN)
NASDAQ:WBTN
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WEBTOON Entertainment Inc
(NASDAQ:WBTN)
47Neutral
Positive Factors
Growth Opportunities
Management expressed a lot of optimism for growth and margin trajectory outside of Q1, with several product investments to come in the second half of the year.
Market Expansion
A large and growing addressable market opportunity, with exposure to the creator economy and an opportunity to capitalize on North America, resulting in steady margin expansion.
Negative Factors
Financial Performance
The 1Q guide was much weaker than anticipated, with revenue growth and EBITDA projections coming in lower than expected.
Operational Challenges
There are several discrete issues affecting the company's performance, including political turbulence in Korea and the Wattpad ban in Turkey.
WEBTOON Entertainment Inc (WBTN) vs. S&P 500 (SPY)
Market Cap
$988.39M
Dividend YieldN/A
Average Volume (3M)342.56K
Price to Earnings (P/E)―
Beta (1Y)0.68
Revenue Growth5.12%
EPS Growth0.68%
CountryUS
Employees1,800
SectorTechnology
Sector Strength43
IndustrySoftware - Application
Share Statistics
EPS (TTM)-1.13
Shares Outstanding128,864,150
10 Day Avg. Volume286,536
30 Day Avg. Volume342,561
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)1.12
Price to Cash Flow (P/CF)67.90
P/FCF Ratio560.30
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$16.25Price Target Upside111.86% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering4
WEBTOON Entertainment Inc Business Overview & Revenue Model
Company DescriptionWEBTOON Entertainment Inc (WBTN) is a leading digital entertainment company specializing in the distribution and publication of web-based comics. As a pioneer in the webtoon format, the company operates a popular platform that hosts a wide range of original and licensed digital comics accessible to a global audience. WEBTOON's core services include providing a user-friendly application where creators can publish their works and readers can easily access and enjoy a diverse array of genres and stories.
How the Company Makes MoneyWEBTOON Entertainment Inc generates revenue through a multi-faceted business model. The company primarily earns money from advertising, where it displays ads within its app and website, leveraging its substantial user base. Another significant revenue stream comes from the sale of digital coins, which users purchase to unlock premium episodes of certain series. Additionally, WEBTOON offers a subscription model called 'WEBTOON Originals,' where users can subscribe to gain early access to new content. The company also engages in strategic partnerships and licensing agreements to expand its content offerings and reach new markets, further contributing to its revenue. Collaborations with other media companies for adaptation of popular webtoons into other formats like movies, TV shows, and merchandise also serve as a potential revenue source.
WEBTOON Entertainment Inc Financial Statement Overview
Summary
WEBTOON Entertainment Inc. faces significant financial challenges, with zero revenue reported recently and negative profit margins indicating inefficiencies. Despite a stable balance sheet with low debt, the company's profitability metrics are weak. While cash flow generation shows some promise, it remains inconsistent.Income Statement
WEBTOON Entertainment Inc. has faced significant challenges on its income statement. The company reported zero revenue in the latest period, which is a substantial decline from the previous year. The gross profit margin and net profit margin are negative, indicating cost pressures and inefficiencies. Revenue growth is non-existent, and both EBIT and EBITDA margins are deeply negative, reflecting ongoing operational losses.25
Negative
Balance Sheet
The balance sheet shows a moderate level of stability. The debt-to-equity ratio is low, suggesting limited leverage risk, and the equity ratio is relatively healthy, indicating a strong equity position. However, the return on equity is negative due to the company's losses, which impacts overall attractiveness.60
Neutral
Cash Flow
Cash flow analysis reveals a mixed picture. The company has managed to generate positive free cash flow in the latest period, but the growth rate has been volatile. The operating cash flow to net income ratio indicates some degree of cash generation capability despite net losses, which is a positive sign. However, the free cash flow to net income ratio remains a concern.55
Neutral
| Breakdown | ||
| Dec 2024 | Dec 2023 | Dec 2022 |
|---|---|---|
| Income Statement | Total Revenue | |
| 0.00 | 1.28B | 1.08B | Gross Profit |
| -1.01B | 295.49M | 269.71M | EBIT |
| -1.23B | -36.36M | -114.72M | EBITDA |
| -109.19M | -96.81M | -84.47M | Net Income Common Stockholders |
| -143.91M | -116.45M | -129.87M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |
| 572.40M | 251.62M | 279.71M | Total Assets |
| 1.94B | 1.78B | 2.02B | Total Debt |
| 17.24M | 33.44M | 53.56M | Net Debt |
| -555.16M | -198.31M | -226.15M | Total Liabilities |
| 378.87M | 429.13M | 505.13M | Stockholders Equity |
| 1.56B | 1.25B | 789.59M |
| Cash Flow | Free Cash Flow | |
| 4.73M | -7.54M | -161.80M | Operating Cash Flow |
| 17.88M | 14.80M | -140.61M | Investing Cash Flow |
| -17.28M | -51.98M | -76.11M | Financing Cash Flow |
| 353.87M | -6.50M | 375.75M |
WEBTOON Entertainment Inc Peers Comparison
Overall Rating
UnderperformOutperform
Sector (57)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | $177.29B | 31.84 | 5.54% | 0.96% | 3.97% | 89.53% | |
74 Outperform | $37.66B | 36.78 | 14.04% | 0.53% | -2.99% | -0.46% | |
74 Outperform | $399.46B | 47.03 | 38.43% | ― | 15.28% | 65.72% | |
73 Outperform | $2.04T | 34.45 | 24.29% | ― | 10.99% | 91.61% | |
62 Neutral | $37.15B | ― | -51.45% | ― | 1.00% | -148.89% | |
57 Neutral | $20.87B | 10.40 | -13.96% | 2.52% | 4.47% | -23.34% | |
47 Neutral | $988.39M | ― | -9.32% | ― | 5.12% | 0.68% |
* Technology Sector Average
Performance Comparison
WBTN
WEBTOON Entertainment Inc
7.93
-14.90
-65.27%
AMZN
Amazon
192.17
11.48
6.35%
EA
Electronic Arts
145.67
14.22
10.82%
TTWO
Take-Two
210.13
60.56
40.49%
DIS
Walt Disney
97.68
-24.04
-19.75%
NFLX
Netflix
928.38
314.17
51.15%
WEBTOON Entertainment Inc Earnings Call Summary
Earnings Call Date: Feb 25, 2025 | % Change Since: -23.53% | Next Earnings Date: Aug 7, 2025
Earnings Call Sentiment Neutral
WEBTOON Entertainment's 2024 performance showed robust revenue growth and strategic success, particularly in Japan and in advertising. However, challenges such as net loss, MAU decline due to external factors, and some revenue declines in specific segments indicate a mixed performance with notable achievements and challenges.Highlights
Record Annual Revenue and Profitability
WEBTOON reported record annual revenue of $1.35 billion, growing 5% on a reported basis and 13% on a constant currency basis. Adjusted EBITDA increased more than 600% to $67.9 million compared to 2023.
Success in Japan Market
WEBTOON took the top position in Japan for the second half of 2024 in the non-game app market, driven by successful content exports and local creator ecosystem investments.
Strong Q4 Revenue Growth
WEBTOON's fourth-quarter revenue grew 10.4% on a constant currency basis, with a reported year-over-year increase of 5.6%, led by Paid Content and Advertising.
Advertising Revenue Surge
Advertising posted 27.4% revenue growth in Q4 on a constant currency basis, with strong performance in Korea and Japan.
Increased Webcomic Engagement
Webcomic app MAU increased 6.7%, driven by growth in English-speaking markets, France, and Thailand.
IP Adaptations Success
Successful launches include Jeongnyeon: The Star Is Born on Disney+, Sidelined: The QB and Me on Tubi, and The Trauma Code: Heroes on Call on Netflix.
Lowlights
Net Loss and Adjusted EBITDA Decline
WEBTOON reported a net loss of $102.6 million for Q4, driven by higher G&A expenses, marketing expenses, and actuarial losses. Adjusted EBITDA was negative $3.5 million, down from a positive $10.4 million in Q4 2023.
MAU Decline
Total company MAU declined roughly 3.7% in Q4, with specific pressure from a government ban on Wattpad in one country, accounting for two-thirds of the MAU decline in Rest of World.
IP Adaptation Revenue Decline
IP Adaptation revenue declined 6.9% year-over-year in Q4 on a constant currency basis, due to declines in Korea and Rest of World.
Impact of Foreign Currency Exchange
Revenue was impacted by weaker foreign currencies, affecting the overall financial performance.
Company Guidance
During the WEBTOON Entertainment Fourth Quarter and Full Year 2024 Earnings Call, the company provided guidance for the upcoming quarter, highlighting several key metrics. For the first quarter of 2025, WEBTOON anticipates revenue growth ranging from 1.7% to 4.8% on a constant currency basis, translating to an estimated revenue of $318 million to $328 million. The company also expects adjusted EBITDA to fall between $0.5 million and $5.5 million, reflecting an adjusted EBITDA margin of 0.2% to 1.7%. Despite facing challenges such as delays in IP Adaptation in Korea and a government ban affecting Wattpad in one country, WEBTOON remains confident in the long-term health of its business. The company reported a record annual revenue of $1.35 billion for 2024, marking a 5% increase on a reported basis and 13% on a constant currency basis, despite a net loss of $153 million primarily due to noncash expenses. Adjusted EBITDA for 2024 was a record $67.9 million, representing over 600% growth compared to 2023. The company also noted strong performance in Japan, where revenue grew by 18.9% on a constant currency basis in Q4, and LINE Manga maintained its top position in the non-game app market by revenue.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
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.