KT (KT) AI Stock Analysis

• Market Cap: $9.18B
• Dividend Yield: 3.11%
• Average Volume (3M): 1.48M
• Price to Earnings (P/E): 21.0
• Beta (1Y): 0.34
• Revenue Growth: -4.85%
• EPS Growth: -43.88%
• Country: US
• Employees: 18,617
• Sector: Communication Services
• Sector Strength: 84
• Industry: Telecommunications Services
• EPS (TTM): 0.78
• Shares Outstanding: 504,043,370
• 10 Day Avg. Volume: 1,446,554
• 30 Day Avg. Volume: 1,475,872
• PEG Ratio: -0.49
• Price to Book (P/B): 0.82
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 7.37
• 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: $22.38
• Price Target Upside: 14.65% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2

KT's overall score reflects a balance between strong revenue growth and strategic partnerships against challenges in profitability due to increased operating expenses and restructuring costs. The stock's technical indicators are positive, suggesting continued upward momentum, while the high P/E ratio raises valuation concerns. The earnings call guidance points to potential future growth, tempered by recent financial setbacks.

Positive Factors

Market Share and Revenue Growth

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.

Profitability

KT's profitability is expected to improve significantly, driven by streamlining low-margin businesses and solid growth in AI and data centers.

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

Labor Costs

KT registered an operating loss of W655bn in 4Q, largely in line with estimates, recognizing one-off labor restructuring costs of c.W1tn.

Operating Profit

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, formerly Korea Telecom, is a leading South Korean telecommunications company. It operates in sectors including telecommunication services, broadband internet, media and content, and financial technology. KT offers a wide range of services, such as mobile and fixed-line telephony, high-speed internet, digital television, and enterprise IT solutions.

How the Company Makes Money

KT Corporation generates revenue through multiple streams. The primary source is its telecommunication services, which include mobile and fixed-line subscriptions and services. Additionally, KT earns money from broadband internet services and digital media offerings, such as IPTV and OTT content. The company's enterprise IT solutions, which provide businesses with cloud services and cybersecurity, also contribute significantly to its earnings. Partnerships with content providers and technology companies, along with strategic investments in fintech, further enhance KT's revenue potential.

KT Financial Statement Overview

Summary

KT displays solid revenue growth and effective cost management, as evidenced by improving gross margins. However, declining net and operational margins highlight potential profitability challenges. The balance sheet reflects a stable leverage position, but reduced ROE suggests profitability issues. Cash flow is improving, but significant capital expenditures impact free cash flow. KT's financials suggest a cautious outlook with strengths in revenue and asset management but challenges in profitability.

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
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
26.43T	26.29T	25.65T	24.90T	23.92T
	Gross Profit
9.15T	8.53T	15.91T	14.86T	14.13T
	EBIT
809.47B	1.43T	1.69T	1.67T	1.64T
	EBITDA
4.24T	5.54T	5.86T	5.73T	4.87T
	Net Income Common Stockholders
470.29B	993.33B	1.26T	1.36T	700.89B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
4.88T	4.27T	3.77T	4.21T	3.84T
	Total Assets
42.00T	42.79T	40.98T	37.16T	33.66T
	Total Debt
11.58T	11.40T	10.01T	8.44T	7.32T
	Net Debt
7.86T	8.52T	7.56T	5.42T	4.68T
	Total Liabilities
24.04T	24.25T	22.57T	20.59T	18.11T
	Stockholders Equity
16.21T	16.73T	16.61T	14.98T	14.01T
Cash Flow		Free Cash Flow
2.16T	1.33T	-390.07B	1.31T	1.02T
	Operating Cash Flow
5.07T	5.50T	3.60T	5.56T	4.74T
	Investing Cash Flow
-2.85T	-4.62T	-4.84T	-5.14T	-3.76T
	Financing Cash Flow
-1.39T	-452.79B	669.33B	-41.28B	-647.59B

KT Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 19.52
• 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 KT, the sentiment is Positive. The current price of 19.52 is above the 20-day moving average (MA) of 19.31, above the 50-day MA of 18.36, and above the 200-day MA of 16.56, indicating a bullish trend. The MACD of 0.33 indicates Positive momentum. The RSI at 60.70 is Neutral, neither overbought nor oversold. The STOCH value of 57.34 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	80 Outperform	$5.44B	12.96	6.74%	2.40%	14.09%	-11.43%
SKM	73 Outperform	$7.80B	8.81	11.08%	5.38%	-2.34%	12.31%
VOD	71 Outperform	$24.03B	9.21	-7.17%	7.22%	-24.84%	-74.77%
KT	70 Outperform	$9.18B	21.03	3.81%	3.11%	-4.85%	-43.88%
TEO	68 Neutral	$5.01B	23.79	3.99%	―	-12.77%	40.80%
TEF	64 Neutral	$28.52B	―	-0.55%	4.83%	1.18%	―
Sector *	60 Neutral	$14.09B	6.90	-3.35%	3.68%	2.44%	-36.27%