Krafton: Shares Near 52-Week Low as Multiples Compress and Profits Stay High

Thesis

The data supports a picture of a profitable, low-leverage software company whose share price has fallen faster than its earnings. The stock is down 10.7% over one month, 20.3% over three months and 37.2% over one year, and it sits 37.5% below its 52-week high of ₩303,500. Over the same period, trailing profit measures remain strong, with net income of ₩835.0B and free cash flow of ₩989.6B.

The data does not support a clean growth story. Operating margin has fallen from 43.6% in 2024 to 31.7% in 2025 and 29.7% on a trailing basis. Net income in 2024 (₩1.31T) exceeded operating income (₩1.18T), which suggests non-operating gains and makes that year a hard comparison. The data does not explain the share price decline. Investor flow, foreign ownership and short balance data are not available.

Business overview

Krafton is a KOSPI-listed software company founded on 2007-03-26 and listed on 2021-08-10. CEO is 김창한. It has 47,392,026 listed shares and a market capitalization of about ₩8.99T. Enterprise value is about ₩8.09T, below market cap because cash exceeds debt. Annual revenue rose from ₩1.89T in 2021 to ₩3.33T in 2025. Revenue was flat to slightly down in 2022, then grew 3.1% in 2023, 41.8% in 2024 and 22.8% in 2025. The data does not break revenue down by product or region. Recent news headlines concern robot AI models and AI hiring, but the data gives no financial detail on those efforts.

Financial analysis

These figures come from filed financial statements (DART). Trailing figures through H1 2026 show revenue of ₩4.45T, operating income of ₩1.32T (29.7% margin) and net income of ₩835.0B (18.8% margin). ROE is 11.9%.

Full-year 2025 revenue was ₩3.33T, up 22.8%. Operating income was ₩1.05T, down from ₩1.18T in 2024, and the margin was 31.7%. Net income was ₩734.8B, down from ₩1.31T in 2024. ROE was 10.6% in 2025, against 21.1% in 2024, 11.2% in 2023, 10.3% in 2022 and 11.3% in 2021.

The balance sheet looks conservative. Liabilities to equity are 32.2%, and cash is ₩903.1B. Borrowings data is not available. Trailing free cash flow is ₩989.6B.

Valuation

Current multiples are a P/E of 10.8, a P/B of 1.2 and a P/S of 2.0. At the end of 2025 the P/E was 15.9 and the P/B 1.7, so both have compressed. Earlier year-end multiples are not available. EV/EBITDA and dividend yield are not available.

Peer comparison is limited. Only Hyundai Autoever has multiples in the data, at a P/E of 50.5 and a P/B of 5.1. NC, Netmarble, PearlAbyss and NHN have no P/E or P/B figures. Krafton's market cap of ₩8.99T is below Hyundai Autoever's ₩9.64T and above NC's ₩4.50T. No meaningful peer valuation range can be drawn from this data.

Catalysts

• A share cancellation decision was filed on 2026-09-30, following a treasury share acquisition result report on 2026-09-09, which points to capital return activity.
• Filings on 2026-09-11 and 2026-09-23 show changes in the largest shareholder's holdings, along with 5%+ holding reports and an insider shareholding report, so ownership changes are worth tracking.
• The H1 2026 report, filed 2026-08-14, showed trailing revenue of ₩4.45T and operating margin of 29.7%, and the next filing will show whether margins stabilize.
• News on 2026-10-13 says Krafton plans to unveil a unified robot AI model in the first half of next year and to hire more than 100 AI staff.
• An IR event was held on 2026-08-31, though the data gives no details of what was discussed.

Risks

• Operating margin has fallen from 43.6% in 2024 to 29.7% on a trailing basis, and further compression would weigh on earnings.
• The share price is down 37.2% over one year and near its 52-week low, so market sentiment is clearly weak, and the data does not explain why.
• Net income of ₩1.31T in 2024 appears to have included non-operating gains, so earnings can be uneven and year-on-year comparisons may be distorted.
• Investor flows, foreign ownership and short balance data are unavailable, so selling pressure cannot be assessed from this data.
• A headline on 2026-10-13 reports a research target price cut to ₩290K, which suggests analysts are lowering expectations. The data gives no further detail.

Closing view

The evidence is mixed. Krafton's filed statements show a profitable company with a 29.7% operating margin, ₩989.6B of trailing free cash flow, ₩903.1B of cash and modest leverage. Its multiples have compressed to a P/E of 10.8 and a P/B of 1.2, and the share price is near its 52-week low. Against that, margins and ROE are well below 2024 levels, revenue growth cannot be broken down by driver, and flow and peer data are largely missing. The data shows that the market has marked the shares down sharply, but it does not show why, and it does not settle whether earnings will recover. Investors would need to watch the next filings for margin direction, capital return activity and ownership changes.

Model estimate of fair value

The valuation model has no estimate for this company yet (not enough data, or no positive value with the base case).

Report history

1. Oct 13, 2026InitiationKrafton: Shares Near 52-Week Low as Multiples Compress and Profits Stay High