GRAVITY Co., Ltd. (NASDAQ: GRVY)

Sector: Communication Services Industry: Electronic Gaming & Multimedia CIK: 0001313310
Market Cap 448.24 Mn
P/B 1.01
P/E 8.02
P/S 1.09
ROIC (Qtr) 13,699.21
Div Yield % 0.00
Rev 1y % (Qtr) 1.26
Total Debt (Qtr) 0.00
Debt/Equity (Qtr) 0.00
Add ratio to table...

About

GRAVITY Co., Ltd. (GRVY) is a prominent player in the digital entertainment industry, specializing in the development and publishing of mobile games. The company's offerings are designed to appeal to a global audience, with a particular focus on the Asian market. GRAVITY Co., Ltd.'s revenue is primarily generated through the sale of in-game items and virtual currencies, as well as advertising and sponsorships. The company's mobile games, such as Ragnarok M: Eternal Love, Ragnarok X: Next Generation, and Priest, are its primary products. These games...

Read more

Investment thesis

Bull case

  • Tangible assets of 516.31M provide exceptional 35.78x coverage of deferred revenue 14.43M, showing strong service capability backing.
  • Short-term investments of 297.69M provide solid 13.09x coverage of other current liabilities 22.74M, indicating strong liquidity.
  • Tangible assets of 516.31M provide robust 22.71x coverage of other current liabilities 22.74M, indicating strong asset backing.
  • Retained earnings of 406.15M provide strong 17.86x coverage of other current liabilities 22.74M, indicating earnings quality.
  • Cash reserves of 140.97M provide robust 1.95x coverage of current liabilities 72.46M, indicating strong short-term solvency.

Bear case

  • Investment activities of 0 provide weak support for R&D spending of 8.96M, which is 0x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • Operating cash flow of 0 provides insufficient coverage of deferred revenue obligations of 14.43M, which is 0x, raising concerns about future service delivery capabilities.
  • Operating cash flow of 0 provides minimal 0x coverage of tax expenses of 15.35M, suggesting potential tax planning inefficiencies or unsustainable tax positions.
  • R&D investment of 8.96M represents just 0.11x of SG&A expenses of 78.83M, indicating potential underinvestment in innovation relative to administrative overhead.
  • Tangible assets of 516.31M provide limited backing for working capital of 425.66M, which is 1.21x, suggesting increased operational risk in market downturns.

Geographical areas [axis] Breakdown of Revenue (2023)

Service concession arrangements [axis] Breakdown of Revenue (2023)

Peer comparison

Companies in the Electronic Gaming & Multimedia
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 NTES NetEase, Inc. 76.19 Bn 15.89 4.76 0.91 Bn
2 EA Electronic Arts Inc. 50.25 Bn 73.90 6.88 1.89 Bn
3 RBLX Roblox Corp 43.57 Bn -40.91 8.91 1.64 Bn
4 TTWO Take Two Interactive Software Inc 34.06 Bn -8.59 5.19 3.51 Bn
5 PLTK Playtika Holding Corp. 1.22 Bn 14.21 0.45 2.54 Bn
6 SOHU Sohu.com Ltd 0.46 Bn 1.16 0.78 0.00 Bn
7 GRVY GRAVITY Co., Ltd. 0.45 Bn 8.02 1.09 0.00 Bn
8 DDI DoubleDown Interactive Co., Ltd. 0.43 Bn 4.17 1.19 0.04 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.01 0.73
EV to Cash from Ops. EV/CFO 0.07 9.02
EV to Debt EV to Debt 0.00 42.93
EV to EBIT EV/EBIT 0.05 5.14
EV to EBITDA EV/EBITDA 0.06 -0.17
EV to Free Cash Flow [EV/FCF] EV/FCF 0.07 2.00
EV to Market Cap EV to Market Cap 0.01 0.31
EV to Revenue EV/Rev 0.01 -278.61
Price to Book Value [P/B] P/B 1.01 5.21
Price to Earnings [P/E] P/E 8.02 5.61
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 1,143.22
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 15.62
Dividend per Basic Share Div per Share (Qtr) 0.00 0.31
FCF Dividend Payout Ratio % FCF Dividend Payout Ratio % 0.00 21.95
Interest Coverage Int. cover (Qtr) 12.96 2.42
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex Growth (1y) % 0.00 -144.92
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -7.96 2,047.52
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 2.39
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -17.43 10.58
EBITDA Growth (1y) % EBITDA Growth (1y) % 0.00 -40.36
EBIT Growth (1y) % EBIT 1y % (Qtr) -18.12 28.44
EBT Growth (1y) % EBT 1y % (Qtr) -12.91 -25.09
EPS Growth (1y) % EPS 1y % (Qtr) -12.19 -25.14
FCF Growth (1y) % FCF Growth (1y) % 0.00 -203.71
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) -2.43 977.78
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.00 0.61
Cash Payout Ratio Cash Payout Ratio 0.00 0.03
Cash Ratio Cash Ratio (Qtr) 1.95 1.98
Current Ratio Curr Ratio (Qtr) 6.87 4.93
Debt to Equity Ratio Debt/Equity (Qtr) 0.00 -1.05
Interest Cover Ratio Int Coverage (Qtr) 12.96 2.42
Times Interest Earned Times Interest Earned (Qtr) 12.96 2.42
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % 0.00 9,395.66
EBIT Margin % EBIT Margin % (Qtr) 26,230.91 10,488.08
EBT Margin % EBT Margin % (Qtr) 17.29 -43,333.75
Gross Margin % Gross Margin % (Qtr) 35.70 57.20
Net Profit Margin % Net Margin % (Qtr) 13.60 -43,332.40