Webtoon Entertainment Inc (WBTN) PT Lowered to $20 at Evercore ISI

Evercore ISI analyst Mark Mahaney lowered the price target on Webtoon Entertainment Inc (NASDAQ: WBTN) to $20.00 (from $23.00) while maintaining a Outperform rating.

The analyst commented: 'We reiterate our Outperform rating, although slightly lowering our estimates and our PT to $20 from $23, in the wake of WBTN’s Miss & Lower Q3 EPS print. Both Revenue of $378MM (+9% Y/Y) and EBITDA of $5.1MM (1.3% margin) came in lower than Street estimates due to weaker than expected Advertising revenue—driven by a major Korean e-commerce customer pullback—and continued softness in ROW, which offset solid IP and Paid Content growth. Fundamentals were mixed in the quarter with Revenue growth, although positive Y/Y, flat sequentially and 700-bps of EBITDA margin contraction driven in part by Gross Margin impact from the movement of Free Coin expenses into COGS. Guidance points to softer fundamentals in Q4, with Advertising still pressured by the major customer pullback and IP Adaptations facing a temporary dip due to timing of crossover milestones."

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