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Deep Value: cash covers about 94% of the stock price

This company holds roughly ₩14.91T in cash and investments — about 94% of its entire stock-market value, based on its latest quarterly filing. You're paying very little for the actual business. Sometimes that's a genuine bargain or a takeover target, sometimes it's cheap for a reason. Not a buy signal on its own — always ask why it's this cheap.

Stock

Kakao

035720.KS
60
Internet Content & Information · Communication Services
Price
₩32300.00
-750.00 (-2.27%)
Market Cap
₩14.23T
Exchange
Korea Exchange
Winston Score
60
Winston is curious
A decent business — some strong pillars, some weaker.
Data as of Oct 9, 2026 · filings through Jun 30, 2026

§How the score breaks down

Quality
Mixed
14/30
Growth
Strong
14/20
Cash Flow
Strong
8/10
Stability
Strong
7/10
Valuation
Good
6/10
Ownership
Good
10/15
Dividends
Weak
1/5

60 of 100 counted points = Winston Score 60.

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§Winston Score History

The full picture

Kakao Corp. is a South Korean internet company best known for KakaoTalk, a messaging app used by nearly every smartphone owner in South Korea. Beyond messaging, Kakao runs a wide range of services including digital payments (Kakao Pay), ride-hailing (Kakao Mobility), music streaming (Melon), webtoons, games, and an AI assistant. It is one of South Korea's dominant internet platforms, comparable in reach to how Meta or Google operate in Western markets.

Kakao makes money through a mix of advertising, transaction fees, content subscriptions, and in-app purchases across its many platforms. Most of its revenue comes from South Korea, though it has been expanding its webtoon and entertainment content into Japan and other Asian markets. Its main competitive advantage is the near-universal adoption of KakaoTalk in South Korea, which gives it a built-in audience for new services. The key risk is regulatory pressure — South Korean authorities have scrutinized Kakao's rapid expansion and market dominance across multiple industries.

Growth Profile

When traditional metrics don't capture the full picture, these are the signals growth stock investors use instead.

Revenue Growth

+3.5% YoY

YoY Growth Rate

Slow revenue growth

EPS Growth

-89.9% YoY

YoY Growth Rate

Earnings declining

R&D Spend

₩0/ year

↓ Declining (-100% vs prior year)

0.0% of revenue

Below sector average (12%)

R&D spend declining — could signal cost-cutting or efficiency

Insider Activity

30.0%ownership

→ Flat

Insider ownership roughly steady over the past year

Cash Runway

5+ years

Quarterly Free Cash Flow

↓ Burn rate worsening

₩16.7T cash & investments at current burn rate

Growth context

Kakao is growing revenue at 3% year-over-year. The Winston Score measures business quality today — these growth metrics show what could matter tomorrow.

The Winston Score above measures business quality today. Growth stocks often score lower because they invest in the future rather than maximising current profits. These metrics show what matters most for evaluating that future.

Share count broadly stable

−0.1% over 4y

The share count has stayed roughly flat over this period — little dilution or buyback activity.

Diluted shares outstanding: 443.0M (2021) → 442.4M (2025)

Score breakdown

Every number that matters to educated investors.

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Quality

Profit per sale
Gross Margin
53.1%
Healthy — 53.1% gross margin
Profit after running costs
Operating Margin
13.2%
Healthy — 13.2% operating margin
Return on the money invested
ROCE
6.9%
Weak — 6.9% return on capital

ROIC between 5% and 15%. They earn 5 to 15 cents back per year on every dollar invested.

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Growth

Sales growth
Sales YoY
+6.1%
Slow sales growth (+6.1% YoY)
Profit growth
EPS YoY
+49.1%
Earnings growing fast (+49.1% YoY)

Earnings growing 25%+ a year. The compounder zone.

How steady the profit is
EPS Consistency
6/8 quarters
Earnings grew in most of the last 8 quarters

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Cash Flow

Profit that turns into cash
Cash Conversion
278%
Turns 278% of profit into real cash
Spare cash per sale
FCF Margin
6.6%
Modest free cash flow (6.6%)

FCF margin between 0% and 10%. Some cash from sales, but not a lot.

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Stability

What it owes vs what it owns
Debt / Equity
0.14
Conservative — low debt load (0.14)
Covers its interest
Interest Cover
3.19x
Tight — interest eats into profit (3.2x)

Interest coverage between 3 and 8. Profits cover interest several times over.

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Valuation

Price vs profit
P/E Ratio (TTM)
44.6x
Pricey — P/E 44.6

P/E over 35. The market is pricing in heavy, sustained growth.

Cheaper or dearer next year
P/E vs Forward
+29.1
GROWING
Earnings expected to grow meaningfully — cheaper on forward P/E (44.6 → 15.5)

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Dividends

Dividend
Dividend Yield
0.23%
Small dividend — 0.23% yield

Modest yield. The bulk of any return needs to come from price appreciation.

Dividend record
Dividend Growth
-42.2%
Dividend cut (-42.2% YoY) — warning sign

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