Fact based stock research
Kakao (KOSE:A035720)

KR7035720002

How to read the free ranks

For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".

Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".

Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.

Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.

(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).

(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.

Kakao stock research in summary

kakaocorp.com

ANALYSIS: With an Obermatt Combined Rank of 39 (worse than 61% compared with investment alternatives), Kakao (Interactive Media & Services, South Korea) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of Kakao are low in value (priced high) with a consolidated Value Rank of 37 (worse than 63% of alternatives), and are riskily financed (Safety Rank of 30, which means above-average debt burdens) but show above-average growth (Growth Rank of 69). ...read more

RECOMMENDATION: A Combined Rank of 39, is a hold recommendation based on Kakao's financial characteristics. As the company Kakao shows low value with an Obermatt Value Rank of 37 (63% of comparable investments are less expensive), investors should look at the other ranks. In this case, growth is expected to be above-average, better than 69% of comparable companies (Obermatt Growth Rank is 69). This is a typical case. Companies with above average growth tend to cost more than stocks with slower growth expectations. If this is a high-growth company, the low Obermatt Safety Rank of 30 is a good sign. The more debt a well-performing company has, the higher the returns to shareholders. However, if growth turns negative or interest rates increase, high debt may become a burden. If you believe the future is bright for Kakao, even a low-value company (in terms of its key financial indicators) can be a good investment. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more

Latest Obermatt Ranks


360° View^new
Sentiment Rank^new
Value Rank	37
Growth Rank	69
Safety Rank	30
Combined Rank	39

Country	South Korea
Industry	Interactive Media & Services
Index	KOSPI
Size class	X-Large

19-Dec-2024. Stock data may be delayed. Log in or sign up to get the most recent research.

Further information

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Analysts rarely agree on a stock’s future. So, who do you believe? Obermatt translates those collective views into a single Sentiment Rank. That plus the financial ranks give you the ultimate 360° View. Sign up to access them.

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Review the performance ranks of the individual metrics that form each investment strategy.

Research History: Kakao

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	30	29	31	37
GROWTH
GROWTH	80	93	23	69
SAFETY
SAFETY	83	37	31	30
SENTIMENT
SENTIMENT	n/a	93	75	^new
360° VIEW
360° VIEW	n/a	83	24	^new

Most recent update of the stock research: 19-Dec-2024. Financial reporting date used for calculating ranks: 30-Sep-2024. Stock research history is based on the Obermatt Method. The higher the rank, the better Kakao is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	30	29	31	37
GROWTH
GROWTH	80	93	23	69
SAFETY
SAFETY	83	37	31	30
COMBINED
COMBINED	93	56	8	39

Last update of combined financial performance: 19-Dec-2024. Stock analysis on combined financial performance: The higher the rank of Kakao the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 37 (worse than 63% compared with alternatives), Kakao shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, where half the indicators are below and half above average for Kakao. Price-to-Sales (P/S) is 52, which means that the stock price compared with what market professionals expect for future sales is lower than for 52% of comparable companies, indicating a good value concerning Kakao's revenue size. The same is valid for the Price-to-Book Capital ratio (also referred to as market-to-book ratio), which is more favorable than for 65% of alternatives (35% of peers have a higher ratio). But expected dividend yields with a Dividend Yield rank of 32 are lower than average (dividends are expected to be lower than 68% of other stocks) while the Price to Profit ratio (or Price to Earnings (P/E) ratio) is higher than average with a Price-to-Profit Rank of 14, making the stock more expensive compared with the company's expected profit levels. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 37, is a hold recommendation based on Kakao's stock price compared with the company's operational size and dividend yields. Low profits and low dividends as seen here for Kakao may indicate a restructuring phase. This could be transitory, making the company a good value when profits recover and dividends return to higher levels. If the stock price is compared with the size indicators for revenue and invested capital, it is on the lower side, making this stock a good value investment (apart from current profit and dividend expectations). We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision. ...read more

VALUE METRICS	2021	2022	2023	2024
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	27	30	38	52
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	42	26	20	14
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	10	36	52	65
DIVIDEND YIELD
DIVIDEND YIELD	60	32	27	32
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	30	29	31	37

Last update of Value Rank: 19-Dec-2024. Stock analysis on value ratios: The higher the rank, the lower the value ratio of Kakao; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 69 (better than 69% compared with alternatives), Kakao shows an above-average growth dynamic in its industry. Investors also speak of positive momentum. The Growth Rank is based on consolidating four value indicators, where half of the indicators are below and half above average for Kakao. Profit Growth, with a rank of 90 (better than 90% of its competitors), and Capital Growth, with a rank of 72, are both positive, which is a healthy sign for positive development. But Sales Growth has only a rank of 32, which means that, currently, professionals expect the company to grow less than 68% of its competitors, and Stock Returns are at a rank of 23. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 69, is a buy recommendation for growth and momentum investors. Stock returns that are a thing of the past can be less of a problem. Below-average revenue growth may be caused by divestments of underperforming businesses. If that is the case, then the positive developments of profit and capital growth are signs of a company with growth potential. If these are the reasons, overall growth is well on track to making this stock attractive for growth investors. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case, especially since the growth performance is mixed here. ...read more

GROWTH METRICS	2021	2022	2023	2024
REVENUE GROWTH
REVENUE GROWTH	45	77	68	32
PROFIT GROWTH
PROFIT GROWTH	25	98	6	90
CAPITAL GROWTH
CAPITAL GROWTH	n/a	70	24	72
STOCK RETURNS
STOCK RETURNS	91	63	37	23
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	80	93	23	69

Last update of Growth Rank: 19-Dec-2024. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of Kakao.

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 30 (better than 30% compared with alternatives), the company Kakao has financing practices on the riskier side, which means that their overall debt burden is above the industry average. This doesn't mean that the business of Kakao is also risky, it only means that the company is on the riskier side in respect to bankruptcy in case things turn sour, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with just one indicator above average for Kakao and the other two below average. Refinancing is at 54, meaning the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 54% of its competitors. But Leverage is high with a rank of 34, meaning the company has an above-average debt-to-equity ratio. It has more debt than 66% of its competitors. Liquidity is also on the riskier side with a rank of 21, meaning the company generates less profit to service its debt than 79% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 30 (worse than 70% compared with alternatives), Kakao has a financing structure that is riskier than that of its competitors. A good Refinancing Rank means that the problems of the company may not be around the corner. But high Leverage is only good if things go well, and low Liquidity is a signal for caution. The financing signals for Kakao are on the riskier side, requiring the company's future to be on the safer side. Investors may want to look at Growth and Sentiment ranks before making an investment decision. In the long-term, investors may have a debt challenge with Kakao and should also compare Obermatt’s Value, Growth, and Sentiment Ranks before making a decision. ...read more

SAFETY METRICS	2021	2022	2023	2024
LEVERAGE
LEVERAGE	55	51	36	34
REFINANCING
REFINANCING	33	44	42	54
LIQUIDITY
LIQUIDITY	100	34	28	21
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	83	37	31	30

Last update of Safety Rank: 19-Dec-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of Kakao and the more cash is available to service its debt.

Sentiment Metrics in Detail

SENTIMENT	2021	2022	2023	2024
ANALYST OPINIONS
ANALYST OPINIONS	n/a	80	87	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	49	31	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	67	39	^new
MARKET PULSE
MARKET PULSE	n/a	85	85	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	93	75	^new

Last update of Sentiment Rank: 19-Dec-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for Kakao.
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