When Can We Expect A Profit From Kakao Games Corp. (KOSDAQ:293490)?

With the business potentially at an important milestone, we thought we'd take a closer look at Kakao Games Corp.'s (KOSDAQ:293490) future prospects. Kakao Games Corp. operates a mobile and PC online game service platform for gamers worldwide. With the latest financial year loss of ₩94b and a trailing-twelve-month loss of ₩117b, the ₩1.4t market-cap company amplified its loss by moving further away from its breakeven target. The most pressing concern for investors is Kakao Games' path to profitability – when will it breakeven? In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

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According to the 15 industry analysts covering Kakao Games, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2025, before generating positive profits of ₩54b in 2026. So, the company is predicted to breakeven just over a year from today. In order to meet this breakeven date, we calculated the rate at which the company must grow year-on-year. It turns out an average annual growth rate of 109% is expected, which is rather optimistic! Should the business grow at a slower rate, it will become profitable at a later date than expected.

We're not going to go through company-specific developments for Kakao Games given that this is a high-level summary, however, bear in mind that typically a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

See our latest analysis for Kakao Games

Before we wrap up, there’s one issue worth mentioning. Kakao Games currently has a relatively high level of debt. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, which in Kakao Games' case is 64%. Note that a higher debt obligation increases the risk around investing in the loss-making company.

Next Steps:

There are key fundamentals of Kakao Games which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at Kakao Games, take a look at Kakao Games' company page on Simply Wall St. We've also compiled a list of important factors you should further examine:

1. Valuation: What is Kakao Games worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether Kakao Games is currently mispriced by the market.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Kakao Games’s board and the CEO’s background.
3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.