[Click-e Stock] Krafton Joins the '3 Trillion Won Club'... But Target Price Cut

DS Investment & Securities lowered its target price for game company Krafton, which surpassed annual sales of 3 trillion won for the first time in its history, to 300,000 won, saying that its asset allocation strategy appears to need a reassessment.

Choi Seungho, an analyst at DS Investment & Securities, stated in a report released on February 10, 2026, "We are maintaining our previous operating profit estimates, but we additionally reflected lower growth expectations, dilution of the advertising business, and a de-rating of the investment strategy." The newly presented target price of 300,000 won reflects the new-title pipeline and investment performance.

First, with regard to Krafton's earnings announced in a disclosure the previous day, Analyst Choi pointed out, "The fourth-quarter results were a major shock, with one-off costs and weak mobile performance," adding, "Operating profit significantly missed the consensus." In the fourth quarter of last year, revenue came in at 919.7 billion won, up 5.6% quarter-on-quarter, but operating profit was tallied at 2.4 billion won, down 99.3%. On an annual basis, while revenue surpassed 3 trillion won, operating profit (1.0544 trillion won, -10.8%) showed a double-digit decline due to the reflection of one-off costs.

He also assessed that the growth potential of its key IP, PUBG, will likely not be as strong as in previous years. Analyst Choi said, "PUBG, as an IP that has already been successfully established, is unlikely to see a steep annual decline, and its growth potential through the Lunar New Year season in February remains high," but added, "It will be difficult to replicate the growth seen in 2024–2025, given the current external competitive landscape."

In addition, the new title Subnautica 2, scheduled for early access release this year, is embroiled in a lawsuit worth about 360 billion won over alleged wrongful dismissal with former founding members of its developer, UW. Analyst Choi noted, "The plaintiffs allege that they were dismissed in order to avoid paying performance-based compensation before the launch of Subnautica 2. We judge that the dismissals were not intentional and share Krafton's legal position," but also remarked, "It is also true that an excessively big success for Subnautica 2 may not work favorably when the court hands down its ruling later." He added, "Regardless of whether that allegation is recognized, the investment in UW, including bonuses, was excessive," and pointed out, "A de-rating of the company's asset allocation strategy is necessary."

Analyst Choi said, "We lowered the target P/E multiple from 17 times to 14 times, the bottom of the game sector range," and added, "We look forward to the release of a meaningful pipeline."

This content was produced with the assistance of AI translation services.