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WEBTOON Entertainment Inc (WBTN)
NASDAQ:WBTN
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WEBTOON Entertainment Inc
(NASDAQ:WBTN)
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Rating:60Neutral
Price Target:
$22.00
▲(13.17% Upside)
WEBTOON Entertainment Inc. has a mixed outlook. The stock benefits from strong technical momentum and positive developments in strategic partnerships and revenue growth. However, significant financial challenges, including negative profitability and valuation concerns, weigh heavily on the overall score. The earnings call provided some optimism, but ongoing operational issues and market challenges remain significant risks.
Positive Factors
Strategic Partnerships
The strategic partnership with Disney enhances WEBTOON's content library, attracting more users and increasing engagement, which can drive long-term revenue growth.
Revenue Growth
Consistent revenue growth indicates strong market demand and effective monetization strategies, supporting sustainable business expansion.
Cash Flow Generation
Positive free cash flow generation suggests operational efficiency and financial stability, providing resources for reinvestment and growth.
Negative Factors
Decline in Global MAU
A decline in global MAU can reduce user engagement and ad revenue potential, impacting long-term growth and market presence.
Profitability Challenges
Negative profit margins highlight ongoing cost management issues, which could hinder the company's ability to achieve sustainable profitability.
Challenges with Wattpad
Ongoing challenges with Wattpad can limit content distribution and user growth, affecting WEBTOON's competitive position and revenue potential.
WEBTOON Entertainment Inc (WBTN) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$2.54B
Dividend YieldN/A
Average Volume (3M)1.12M
Price to Earnings (P/E)―
Beta (1Y)1.38
Revenue Growth5.79%
EPS Growth44.42%
CountryUS
Employees1,800
SectorTechnology
Sector Strength88
IndustrySoftware - Application
Share Statistics
EPS (TTM)-0.03
Shares Outstanding130,608,280
10 Day Avg. Volume2,140,734
30 Day Avg. Volume1,117,391
Financial Highlights & Ratios
PEG Ratio-0.37
Price to Book (P/B)1.19
Price to Sales (P/S)1.29
P/FCF Ratio368.87
Enterprise Value/Market Cap0.28
Enterprise Value/Revenue0.52
Enterprise Value/Gross Profit2.16
Enterprise Value/Ebitda-9.86
Forecast
1Y Price Target
$19.20Price Target Upside-1.23% Downside
Rating ConsensusModerate Buy
Number of Analyst Covering5
WEBTOON Entertainment Inc Business Overview & Revenue Model
Company DescriptionWEBTOON Entertainment Inc. operates a storytelling platform worldwide. The company's platform allows a community of creators and users to discover, create, and share new content. Its platform offers stories primarily in two ways, including web-comics, a graphical comic-like medium; and web-novels, which are text-based stories. The company was founded in 2014 and is headquartered in Los Angeles, California. WEBTOON Entertainment Inc. operates as a subsidiary of NAVER Corporation.
How the Company Makes MoneyWEBTOON Entertainment Inc generates revenue through several key streams. Primarily, the company monetizes its platform through advertising, offering ad placements to businesses targeting its large and engaged user base. Additionally, WEBTOON provides a 'Fast Pass' feature, where users can pay to access episodes of comics ahead of the free release schedule, creating a direct revenue stream from its readers. Another significant revenue source is the partnership with creators, where WEBTOON shares a portion of the advertising and Fast Pass revenue with the content creators, incentivizing high-quality content production. Strategic partnerships and collaborations with other media companies for licensing and adapting popular series into other formats, such as films and merchandise, also contribute to the company's earnings.
WEBTOON Entertainment Inc Earnings Call Summary
Earnings Call Date:Aug 12, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Nov 06, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted strong revenue growth, significant strategic partnerships, and reductions in net loss, but also noted declines in global MAU and challenges with Wattpad. The sentiment is mixed with both strong positive growth indicators and notable areas of concern.Q2-2025 Updates
Positive Updates
Strong Revenue Growth
Revenue grew 5.5% on a constant currency basis, with reported revenue up 8.5% year-over-year.
Significant Reduction in Net Loss
Net loss decreased to $3.9 million from $76.6 million in the prior year, attributed to lower G&A expenses associated with the IPO.
Successful Strategic Partnerships
Partnerships with Disney and Dark Horse Comics to bring popular franchises like Spider-Man, Avengers, and Star Wars to the platform.
Growth in English Platform
English platform WebComic app MAU was up 19% for the second consecutive quarter, showing momentum in key markets.
Advertising Revenue Increase
Advertising posted 10.2% revenue growth year-over-year, driven by growth in Korea and Japan.
IP Adaptations Business Growth
Revenue from IP adaptations increased by 42.6% year-on-year on a constant currency basis.
Negative Updates
Decline in Global MAU
Global MAU was down 7.6%, with declines primarily in Korea and Rest of World, influenced by government bans on Wattpad.
Decrease in Adjusted EBITDA
Adjusted EBITDA decreased to $9.7 million from $20.4 million in the prior year.
Challenges with Wattpad
Wattpad continues to face challenges with government bans and issues with search engine indexing affecting MAU.
Decrease in Korea MAU
Korea MAU decreased by 11.1% year-over-year.
Company Guidance
During the WEBTOON Entertainment Second Quarter 2025 Earnings Conference Call, the company provided guidance for the third quarter, expecting revenue growth in the range of 9.4% to 12.2% on a constant currency basis, translating to anticipated revenue between $380 million and $390 million. The adjusted EBITDA is projected to be in the range of $2 million to $7 million, representing a margin of 0.5% to 1.8%. The call highlighted strong revenue growth in Q2, with an 8.5% increase in reported revenue and a net loss reduction to $3.9 million from $76.6 million the previous year. The company also discussed strategic initiatives, including a major partnership with Disney to bring 100 blockbuster comics to the platform, and steady growth in the English platform WebComic app MAU, which increased by 19% for the second consecutive quarter. Adjusted earnings per share were reported at $0.07, down from $0.18 the prior year.WEBTOON Entertainment Inc Financial Statement Overview
Summary
WEBTOON Entertainment Inc. is facing significant financial challenges, particularly with its income statement where revenue has fallen dramatically. While the balance sheet remains relatively stable with a strong equity position and low debt levels, the company's profitability metrics are weak. Cash flow generation shows some promise but 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 | TTM | Dec 2024 | Dec 2023 | Dec 2022 |
|---|---|---|---|---|
Income Statement | ||||
| Total Revenue | 1.37B | 1.35B | 1.28B | 1.08B |
| Gross Profit | 332.54M | 339.07M | 295.49M | 269.71M |
| EBITDA | -72.71M | -113.09M | -96.81M | -84.47M |
| Net Income | -100.01M | -143.91M | -116.45M | -129.87M |
Balance Sheet | ||||
| Total Assets | 2.01B | 1.94B | 1.78B | 2.02B |
| Cash, Cash Equivalents and Short-Term Investments | 581.55M | 598.73M | 251.62M | 279.71M |
| Total Debt | 27.71M | 17.24M | 33.44M | 53.56M |
| Total Liabilities | 411.80M | 378.87M | 429.13M | 505.13M |
| Stockholders Equity | 1.51B | 1.47B | 1.25B | 1.38B |
Cash Flow | ||||
| Free Cash Flow | -27.56M | 4.73M | -7.54M | -161.80M |
| Operating Cash Flow | -17.46M | 17.88M | 14.80M | -140.61M |
| Investing Cash Flow | -4.26M | -17.28M | -51.98M | -76.11M |
| Financing Cash Flow | 18.04M | 353.87M | -6.50M | 350.34M |
WEBTOON Entertainment Inc Technical Analysis
Positive
19.44
Price Trends
14.02
Positive
11.49
Positive
11.09
Positive
Market Momentum
1.93
Negative
65.09
Neutral
55.01
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For WBTN, the sentiment is Positive. The current price of 19.44 is above the 20-day moving average (MA) of 17.24, above the 50-day MA of 14.02, and above the 200-day MA of 11.09, indicating a bullish trend. The MACD of 1.93 indicates Negative momentum. The RSI at 65.09 is Neutral, neither overbought nor oversold. The STOCH value of 55.01 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for WBTN.
WEBTOON Entertainment Inc Risk Analysis
WEBTOON Entertainment Inc disclosed 74 risk factors in its most recent earnings report. WEBTOON Entertainment Inc reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
WEBTOON Entertainment Inc Peers Comparison
Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
60 Neutral | $2.54B | ― | -6.61% | ― | 5.79% | 44.42% | |
59 Neutral | 534.46M | 252.68 | 8.57% | ― | 30.92% | ― | |
58 Neutral | 272.70M | -3.88 | -11.62% | ― | -28.45% | -224.48% | |
56 Neutral | 255.53M | -7.01 | -24.17% | ― | -6.88% | 15.83% | |
49 Neutral | 653.19M | -0.85 | -147.04% | ― | -5.06% | -2318.18% | |
47 Neutral | 17.32M | -0.94 | -124.47% | ― | -15.10% | 74.63% | |
61 Neutral | $37.18B | 12.37 | -10.20% | 1.83% | 8.50% | -7.62% |
* Technology Sector Average
Performance Comparison
WBTN
WEBTOON Entertainment Inc
19.44
8.00
69.93%
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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.