Skip to Content

NAVER Corp 035420

Morningstar Rating
KRW 192,000.00 −3,000.00 (1.54%)
View Full Chart
Unlock our analysis with Morningstar Investor

Company Report

Naver Earnings: Strong Profit, but E-Commerce Competition Ramping Up; Fair Value Down to KRW 255,000

Naver reported fourth-quarter 2023 revenue growth of 11.7% with operating profit up 20.5% year on year to another quarterly record of KRW 406 billion, which is slightly better than our expectations. Excluding the effects of accounting changes from gross to net revenue in commerce, financial technology, and Webtoon as well as the acquisition of Poshmark, fourth-quarter revenue was up 8.3% year on year and 2023 revenue was up 11.8%. The key drivers of fourth-quarter operating profit growth were the search and e-commerce businesses, which increased operating profit by KRW 69 billion or 16% year on year and the content business, which reduced its operating loss by KRW 46 billion to KRW 32 billion. Cost efficiencies in both segments were key to the improved operating profit, but reduced depreciation also played a part. The company increased its average depreciation life span to five years from four years previously, which we estimate added around KRW 15 billion or 4% to quarterly operating profit. The Poshmark acquisition was completed as of Jan. 5, 2023, which added to revenue growth and although it was EBITDA-positive, its operating profit was not disclosed.

Price vs Fair Value

035420 is trading at a 25% discount.
Price
KRW 191,999.96
Fair Value
KRW 345,891.00
Uncertainty
High
1-Star Price
KRW 375,491.00
5-Star Price
KRW 692,536.00
Economic Moat
Zrbsrl
Capital Allocation
Rbkpyhtj

Bulls Say, Bears Say

Bulls

Naver’s domestic online advertising revenue will continue its strong growth momentum via increased e-commerce-related ads.

Bears

Google could continue to take internet search market share in South Korea, eventually killing Naver’s cash cow, or at least reducing its “milk production”.

Is it the right time to buy, sell, or hold?
Start a free trial of Morningstar Investor to unlock exclusive ratings and continuous analyst coverage to help you decide if 035420 is a good fit for your portfolio.

News

Trading Information

Previous Close Price
KRW 195,000.00
Day Range
KRW 192,000.00197,400.00
52-Week Range
KRW 178,000.00241,500.00
Bid/Ask
KRW 192,000.00 / KRW 192,100.00
Market Cap
KRW 28.95 Tril
Volume/Avg
1.2 Mil / 761,101

Key Statistics

Price/Earnings (Normalized)
26.38
Price/Sales
3.08
Dividend Yield (Trailing)
0.63%
Dividend Yield (Forward)
0.63%
Total Yield
0.63%

Company Profile

Naver has been the leading search portal in South Korea for many years. The company has also been evolving into an internet platform providing a variety of internet services, such as news, a dictionary, maps, digital comic content, social networking, e-commerce, videos, fintech services based on online payments, and Cloud services. Naver was also the incubator of Line Yahoo, the leading mobile messaging app in Japan, Taiwan, Thailand, and Indonesia, which merged with Z Holdings (Yahoo Japan), with Naver now owning 32.5% of the merged entity renamed LY. Snow, the Snapchat-like mobile app launched in 2015, has also been well received in South Korea, Japan, and other Asian countries.
Sector
Communication Services
Industry
Internet Content & Information
Stock Style Box
Large Core
Total Number of Employees
4,318

Competitors

Valuation

Metric
035420
BABA
GOOGL
Price/Earnings (Normalized)
26.388.4223.28
Price/Book Value
1.281.316.03
Price/Sales
3.081.465.68
Price/Cash Flow
14.927.1316.52
Price/Earnings
035420
BABA
GOOGL

Financial Strength

Metric
035420
BABA
GOOGL
Quick Ratio
1.101.711.94
Current Ratio
1.141.802.10
Interest Coverage
93.02266.75
Quick Ratio
035420
BABA
GOOGL

Profitability

Metric
035420
BABA
GOOGL
Return on Assets (Normalized)
2.10%8.98%24.48%
Return on Equity (Normalized)
3.21%15.96%35.00%
Return on Invested Capital (Normalized)
2.51%12.33%30.54%
Return on Assets
035420
BABA
GOOGL
See how this stock stacks up to its competitors with Morningstar Investor

Internet Content & Information Industry Comparables

Ticker
Name
Morningstar Rating for Stocks
Economic Moat
Market Cap
GOOGL
Alphabet Inc Class ACjc$1.7 Tril
GOOG
Alphabet Inc Class CGfqkx$1.7 Tril
META
Meta Platforms Inc Class AYph$1.3 Tril
TCEHY
Tencent Holdings Ltd ADRLxjw$334.2 Bil
SPOT
Spotify Technology SALltb$52.0 Bil
DASH
DoorDash Inc Ordinary Shares - Class ATsbjwv$51.5 Bil
BIDU
Baidu Inc ADRQrxf$36.2 Bil
PINS
Pinterest Inc Class AFqhdzn$24.7 Bil
SNAP
Snap Inc Class ADxms$18.6 Bil
TME
Tencent Music Entertainment Group ADRFfryxk$18.4 Bil

Sponsor Center