Digital Trends And Southeast Asia Expansion Will Spark Streaming Success

Key Takeaways

• Rapid global expansion and AI integration are set to drive substantial growth in user engagement, monetization, and market share beyond current expectations.
  
• Shifting ad spend, rising virtual commerce, and effective compliance investments position Soop for durable profit gains and industry leadership.
  
• Overdependence on a single platform, rising costs, eroding market share, and regulatory risks threaten Soop's revenue stability and constrain long-term earnings growth.

Catalysts

Operates as an entertainment company in South Korea.

• Analyst consensus sees global expansion, especially in Southeast Asia, as a revenue catalyst, but this is likely understated-Soop's rapidly growing partnerships, exclusive content deals, and technical improvements suggest the global business can deliver a significant inflection in both user growth and monetization, potentially accelerating revenue and earnings far beyond current forecasts as adoption of live streaming and mobile content spikes in these emerging markets.
  
• While analyst consensus highlights AI-driven engagement and products as a growth lever, it may not capture the scale of transformation enabled by early and deep integration of AI-Soop's pioneering streamer-facing tools and video assistants not only boost user stickiness but position the company to fundamentally reshape platform economics, driving durable improvements in user retention and structurally higher net margins through automation and personalization.
  
• The ongoing shift of digital ad spend and branded content from traditional channels to streaming is accelerating faster than expected, and Soop-now with PlayD integration-stands to disproportionately benefit from this long-term structural tailwind, driving robust, high-margin advertising revenue growth.
  
• Soop is uniquely positioned to capitalize on the explosive growth in virtual streamer and commerce-driven content, combining its proprietary live commerce tools, AI-powered services, and creator ecosystem to unlock entirely new revenue streams from influencer-led commerce, accelerating earnings diversification.
  
• With increasing regulatory pressure driving industry consolidation, Soop's investments in compliance, cross-border partnerships, and proprietary technology place it at the forefront for capturing market share and yield long-term margin expansion as less-prepared competitors exit, leading to stronger profitability over time.

Soop Future Earnings and Revenue Growth

Assumptions

• This narrative explores a more optimistic perspective on Soop compared to the consensus, based on a Fair Value that aligns with the bullish cohort of analysts.
• The bullish analysts are assuming Soop's revenue will grow by 14.5% annually over the next 3 years.
• The bullish analysts assume that profit margins will shrink from 24.2% today to 22.9% in 3 years time.
• The bullish analysts expect earnings to reach ₩146.8 billion (and earnings per share of ₩12684.45) by about August 2028, up from ₩103.3 billion today. The analysts are largely in agreement about this estimate.
• In order for the above numbers to justify the price target of the more bullish analyst cohort, the company would need to trade at a PE ratio of 14.5x on those 2028 earnings, up from 8.1x today. This future PE is lower than the current PE for the KR Interactive Media and Services industry at 18.4x.
• Analysts expect the number of shares outstanding to remain consistent over the next 3 years.
• To value all of this in today's terms, we will use a discount rate of 8.21%, as per the Simply Wall St company report.

Soop Future Earnings Per Share Growth

Risks

• Soop's heavy reliance on a single, core streaming platform with minimal diversification exposes it to platform fatigue and user churn, as shown by slowing platform revenue growth and increased competition, which can undermine long-term revenue trajectory.
  
• Operating expenses are rising faster than revenues, with employment costs, advertising commissions, and copyright fees all up significantly year-on-year, while operating profit and net income are both down year-on-year and quarter-on-quarter, suggesting future margin compression and weaker earnings.
  
• Intense industry competition, particularly from emerging or established rivals like Chzzk, is eroding Soop's relative market position, as highlighted by traffic gaps and a decline in paying users, risking a further loss in market share and lower top-line growth.
  
• Soop's business model remains disproportionately dependent on digital advertising, which is increasingly vulnerable to regulatory tightening around data privacy and ad targeting, as well as the growing effectiveness of ad-blocking technologies, all of which threaten future monetization and revenue stability.
  
• Escalating content acquisition and compliance costs (such as bidding wars for content rights and content moderation in new global markets) combined with an uncertain ability to keep pace with fast-evolving platform technologies could further pressure net margins and limit sustainable long-term earnings growth.

Valuation

• The assumed bullish price target for Soop is ₩167941.39, which represents two standard deviations above the consensus price target of ₩115789.47. This valuation is based on what can be assumed as the expectations of Soop's future earnings growth, profit margins and other risk factors from analysts on the bullish end of the spectrum.
• However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of ₩170000.0, and the most bearish reporting a price target of just ₩75000.0.
• In order for you to agree with the bullish analysts, you'd need to believe that by 2028, revenues will be ₩640.4 billion, earnings will come to ₩146.8 billion, and it would be trading on a PE ratio of 14.5x, assuming you use a discount rate of 8.2%.
• Given the current share price of ₩78500.0, the bullish analyst price target of ₩167941.39 is 53.3% higher.
• We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.