KOSPI · 035720 · Internet · ₩KAKAO

Kakao카카오

035720 · KOSPI · ₩KAKAO · 카카오

₩29,800▲ ₩300 (1.02%)End-of-day · Oct 28, 2026 · End-of-day prices.

Trade

Sell Buy

Valuation model · Discounted cash flow (DCF)

We use a 5-year discounted cash flow: the value of the cash the business is expected to produce, in today's money.

Fair value per share

₩42,755

vs the current price (₩29,800)

Enterprise value: ₩9.6T
Equity value: ₩19T
WACC: 7.4%

Model estimate based on the assumptions shown. Not a price target and not a buy or sell signal. This is not financial advice.

Why the model and the price differ

The model is 43% away from today's price. A gap this size usually means the market expects something the past figures don't show yet, or the model leaves something out. What we can see:

To match today's price of ₩29,800, the model needs an operating margin of 3.9% every year (it uses 8.4%).
Or revenue growth −17.2 points a year higher than assumed in each of the 5 years.

Treat the model as a starting point: change the assumptions to the story you believe, and compare with the multiples check below.

Bear / Base / Bull

Bear: ₩32,603; +9.4%
Base: ₩42,755; +43.5%
Bull: ₩59,847; +100.8%

Bear: revenue growth 3 points lower every year, EBIT margin 2 points lower, WACC 1 point higher. Bull: the opposite.

Assumptions

Cycle options

Margin path

Every year uses the cycle-average margin (8.4%).

Revenue growth

Revenue growth, year 16%
How much sales grow that year, compared with the year before.
Default: the last 3 years' revenue growth (6% a year, annual reports), fading to 3% by year 5.
Revenue growth, year 25.3%
How much sales grow that year, compared with the year before.
Default: the last 3 years' revenue growth (6% a year, annual reports), fading to 3% by year 5.
Revenue growth, year 34.5%
How much sales grow that year, compared with the year before.
Default: the last 3 years' revenue growth (6% a year, annual reports), fading to 3% by year 5.
Revenue growth, year 43.8%
How much sales grow that year, compared with the year before.
Default: the last 3 years' revenue growth (6% a year, annual reports), fading to 3% by year 5.
Revenue growth, year 53%
How much sales grow that year, compared with the year before.
Default: the last 3 years' revenue growth (6% a year, annual reports), fading to 3% by year 5.

Business

EBIT margin8.4%
Operating profit as a share of revenue.
Default: through-the-cycle average of the last 12 months and the last 5 annual reports' operating margins.
Tax rate27.5%
Share of operating profit paid as corporate tax.
Default: Korea's top corporate tax rate (25%) plus 10% local income tax.
Depreciation & amortisation6.3%
The non-cash cost of wearing out equipment, added back to cash flow (% of revenue).
Default: not in the statements, so 80% of capital spending (most spending replaces equipment that wears out).
Capital spending7.9%
Money spent on factories, equipment, software and other long-term assets (% of revenue).
Default: average of the last 3 annual reports (cash flow statements; equipment and intangibles).
Working capital-10%
Stock and unpaid customer bills, less unpaid supplier bills, as a % of revenue. Each year's extra revenue ties up this much more cash.
Default: working capital (current assets less cash and deposits, minus current liabilities other than borrowings) as a share of revenue, averaged over the last 3 years.

Discount rate

Terminal growth2%
How fast cash flows keep growing every year after year 5.
Default: about Korea's long-run inflation plus real growth.
Risk-free rate4.11%
Yield on Korea's 10-year government bond: the return with almost no risk.
Default: Korea Treasury Bond 10-year yield on 2026-10-28.
Beta0.6
How much the share moves when the market moves: 1 means just like the market.
Default: 105 weeks of weekly returns against KOSPI (official index); raw beta 0.33, adjusted toward 1 and kept between 0.6 and 2.0.
Equity risk premium5.5%
The extra return investors want for owning shares instead of bonds.
Default: a typical premium for Korean shares.
Cost of debt (before tax)5.61%
The interest rate the company would pay to borrow.
Default: the 10-year yield plus a 1.5% credit spread.

Starting point

Revenue (TTM to H1 2026): ₩8.2T
Net debt (borrowings and leases − cash and deposits): −₩9T
+ Stakes and investments: ₩3.6T; Associates, long-term financial assets and deposits (book value)
− Minority interests: ₩3.3T
Shares: 443,000,510
Share price: ₩29,800
Market cap: ₩13T

TTM = trailing 12 months: the last four reported quarters added together. "TTM to H1 2026" is the 12 months up to the latest quarterly or half-year report (H1 = to the end of June). Year 1 grows from there.

Past years and projection

Grey columns are reported results from the annual reports (after-tax EBIT at the model's tax rate), so you can check the growth and margin assumptions against the past. Years 1–5 are the model.

	FY2023	FY2024	FY2025	Year 1	Year 2	Year 3	Year 4	Year 5
Revenue	₩7.6T	₩7.9T	₩8.1T	₩8.7T	₩9.2T	₩9.6T	₩10T	₩10T
Growth	11.1%	4.2%	2.9%	6.0%	5.3%	4.5%	3.8%	3.0%
EBIT	₩461B	₩460B	₩732B	₩734B	₩773B	₩808B	₩839B	₩864B
EBIT margin	6.1%	5.8%	9.0%	8.4%	8.4%	8.4%	8.4%	8.4%
After-tax EBIT	₩334B	₩334B	₩531B	₩532B	₩561B	₩586B	₩608B	₩626B
+ Depreciation	—	—	—	₩551B	₩580B	₩606B	₩629B	₩648B
− Capital spending	₩722B	₩506B	₩614B	₩691B	₩727B	₩760B	₩789B	₩813B
− Working capital	₩3.7T	−₩5.4T	−₩1.6T	−₩49B	−₩46B	−₩41B	−₩37B	−₩30B
Free cash flow	—	—	—	₩442B	₩460B	₩473B	₩485B	₩492B
Discount factor	—	—	—	0.931	0.867	0.807	0.751	0.700
Present value	—	—	—	₩412B	₩398B	₩382B	₩364B	₩344B

Terminal value ₩11T, worth ₩7.7T today: 80% of enterprise value. It assumes spending settles at 110% of depreciation once growth slows to the terminal rate.

Cross-check: what the market has paid before

For cyclical businesses, analysts check a DCF against the multiples the stock has traded at through past cycles. Price / book is the usual anchor for them: P/E looks highest at the bottom of a cycle, when earnings are smallest, and lowest at the top. The price each band would give today:

	Low	Typical	High
Price / book (book value ₩26,596 a share)Now 1.12×	₩42,7631.61×	₩57,9842.18×	₩106,2984.00×

Low, typical and high are the 10th percentile, middle and 90th percentile of month-end multiples since 2021, each against the latest report out by then, per share at today's share count; loss years and P/E above 100 are left out. Run-rate earnings are one quarter × 4, not a forecast. Model estimate based on the assumptions shown. Not a price target and not a buy or sell signal.

Sensitivity

Fair value per share as two inputs change; the middle is the current case.

WACC ↓ · Terminal growth →	1.0%	1.5%	2.0%	2.5%	3.0%
6.4%	₩43,208	₩45,280	₩47,825	₩51,023	₩55,163
6.9%	₩41,277	₩42,980	₩45,031	₩47,549	₩50,714
7.4%	₩39,649	₩41,070	₩42,755	₩44,784	₩47,276
7.9%	₩38,259	₩39,460	₩40,865	₩42,532	₩44,541
8.4%	₩37,057	₩38,084	₩39,272	₩40,664	₩42,313

Now (TTM)

Market cap: ₩13T
Enterprise value: ₩2.4T
P/E: 38.1×
P/B: 1.1×
P/S: 1.6×
EV/EBITDA: —
Dividend yield: 0.3%

Over time (at each year end)

	2025	2024	2023	2022	2021
Price	₩60,100	₩38,200	₩54,300	₩53,100	₩112,500
Market cap	₩27T	₩17T	₩24T	₩24T	₩50T
P/E	54.2×	306.1×	—	17.3×	35.9×
P/B	2.4×	1.7×	2.5×	2.4×	5.0×
P/S	3.3×	2.1×	3.2×	3.5×	8.4×
EV/EBITDA	—	—	—	—	—
Dividend yield	0.1%	0.2%	—	—	—

Versus similar companies

Company	P/E	P/B	P/S	EV/EBITDA	Dividend yield
Kakao	38.1×	1.1×	1.6×	—	0.3%
NAVER	13.4×	0.9×	2.1×	—	1.5%
Daou Technology	1.9×	0.4×	0.0×	—	5.4%
NICE Information Service	11.6×	2.1×	1.6×	6.8×	3.0%
Kinx	31.7×	3.6×	4.6×	13.9×	0.4%
Cafe24	11.6×	1.6×	1.3×	—	0.0%
coocon	11.3×	1.3×	3.6×	—	1.2%
Similar companies (median)	11.6×	1.4×	1.8×	6.8×	1.3%

Calculated from end-of-day prices and filed financial statements. Not a recommendation. This is not financial advice.

Also known as: Kakao / 카카오 / 035720 / KRX:035720

Source: KRX statistical information