The firm maintained its “Buy” rating and kept its target price at 310,000 won. Based on the previous trading day’s closing price (216,500 won), the projected upside is 43.2%.
Kim Hye-young, an analyst at Daol Investment & Securities, stated in a report published today, “Third-quarter revenue and operating profit fell short of consensus estimates due to a decline in PC segment revenue,” adding, “We believe this is a time when we need to take a structural view toward 2027.”
KRAFTON announced in a regulatory filing the previous day that its third-quarter consolidated revenue increased 11.6% year-over-year to 971.4 billion won, while operating profit decreased 35.5% to 225.0 billion won (operating profit margin of 23.2%). Both revenue and operating profit fell short of market consensus (revenue of 1.1222 trillion won and operating profit of 272.6 billion won).
In particular, the company posted a net loss attributable to controlling shareholders of 64.1 billion won, shifting to a deficit due to the recognition of foreign exchange losses on assets.
By business segment, the slowdown in the PC division was particularly pronounced. Third-quarter revenue for the PC division stood at 238.9 billion won, plummeting 32.5% year-over-year and 57.4% quarter-over-quarter. Analyst Kim explained, “Revenue fell sharply due to a lack of significant major events, compounded by a lull in new game releases.”
In contrast, the mobile division supported the company’s performance by generating 504.3 billion won in revenue, a 3.2% increase year-over-year. This was driven by the onset of the seasonal peak period and the success of a collaboration with the Chinese animated series “Jianlai” (Sword and Flame) intellectual property (IP) in August.
On the cost front, operating expenses for the third quarter fell 15.1% quarter-over-quarter to 746.4 billion won, driven by declines in revenue at ADK—the company’s advertising and content subsidiary—and in the PC segment; however, they are expected to rise again in the fourth quarter as the advertising peak season begins.
Daol Investment & Securities highlighted KRAFTON’s proactive shareholder return policy. Analyst Kim stated, “By the third quarter, the company had completed a reduced dividend of 99.6 billion won and the cancellation of 517.6 billion won worth of treasury stock, and plans to purchase an additional 300 billion won worth of treasury stock by February 3, 2027, for full cancellation,” adding “It has become highly likely that the company will achieve its previously announced goal of ‘1 trillion won in shareholder returns by 2028’ ahead of schedule.”
Regarding short-term stock price trends, he assessed that the market needs to take a breather. Analyst Kim noted, “Since there are no major new releases scheduled through the fourth quarter of this year and it is a seasonal off-peak period, the upward trend in the stock price may be limited,” but added, “However, a major event marking the 10th anniversary of ‘Battlegrounds’ is scheduled for 2027, and with more than seven major new titles in the pipeline—including ‘Palworld Mobile’ and ‘Enjoy’ (official launch)— 'Palworld Mobile,' and 'Enjoy' (full release), so market expectations will gradually be reflected in the stock price."
