Kakao share price 17ten-thousand won →3ten-thousand won, target price repeatedly lowered
Kakao's share price has fallen from the previous 17ten-thousand-won range to the 3ten-thousand-won range, and some securities firms have sharply lowered their target prices. Analysts expect 2quarter earnings to be broadly stable, but pointed to declining KakaoTalk users and the absence of an AI-related revenue model as reasons for the downgrades.
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Kakao's share price has fallen from the previous 17ten-thousand-won range to the current 3ten-thousand-won range. The development is reported to reflect weakening investor sentiment.
Some securities firms lowered their target prices. DB Securities set it at 57,000won, while Hanwha Securities set it at 62,000won, respectively.
Analysts expect this year's 2quarter earnings to be stable. The outlook for 2quarter earnings is generally defensive.
Among the company’s main businesses, Talk Biz advertising and commerce were assessed as showing solid momentum. Advertising and commerce revenue were cited as pillars supporting performance.
By contrast, the decline in the number of KakaoTalk users was pointed out. In the articles, the decline in users was mentioned as a factor constraining service growth.
Several securities firms cited the absence of a concrete revenue model for the AI business as the reason for lowering their target prices. The reports included the observation that AI-related revenue has not yet translated into clear cash flow.
Some reports presented cases in which target prices were lowered even as performance improved. These cases were summarized as reflecting a gap between securities firms’ valuations and their growth expectations.