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WEBTOON (NASDAQ:WBTN)
Is Webtoon Storyboarding the Next Generation of Entertainment?
Michelle Pinzari & Neha Rajamani | JULY 31, 2025
ABOUT
WEBTOON Entertainment Inc. (WBTN)
As a pioneer of the mobile webcomic format, WEBTOON Entertainment Inc. (WBTN) is a global entertainment company that operates several leading storytelling platforms. The company’s platform primarily offers content in 2 ways: web-comics and web-novel. Its CANVAS user-generated content platform empowers any individual to start creating, causing a huge uprise in WEBTOON Originals creators and series. Its popular series have been adapted to platforms like Netflix, Prime Video, and Crunchyroll, while the company also collaborates with major names such as Discord, HYBE, and DC Comics. The stories have also fostered many passionate fandoms, creating a new stream of pop culture. With approximately 150 million monthly active users, WEBTOON Entertainment’s IP & Creator Ecosystem, including WEBTOON, Wattpad, Studio N, allows users and creators to discover, create, and share new content.
History
During the early 2000s, the comic book market was failing as there was a lack of creativity and new publications available. At that time, Junkoo Kim worked for a large tech company called Naver. After witnessing the stagnant industry, Kim took his passion for comics and turned it into a global sensation, launching Naver Webtoon in South Korea in 2005. The goal was to inspire a new generation of creators to publish digital comics online. He pioneered the mobile vertical-scrolling technology that would make comics accessible to every user across the world at any time. In 2014, the company rebranded itself as LINE Webtoon and expanded globally, particularly in the United States. In 2016, a portion of the company was incorporated into a smaller entity called WEBTOON Entertainment Inc. with Junkoo Kim as the CEO. Three years later in 2019, the company rebranded itself once more, finalizing their company as WEBTOON and moving headquarters from Seoul to Los Angeles. As of October 2023, WEBTOON’s platform is available in 10 languages, enabling the company to expand into international markets. On June 27, 2024, the company went public under the ticker “WBTN” and an IPO of $21.00 per share.
As of July 31, 2025
1.27 B
Market Cap
--
PE Ratio (TTM)
--
EV/EBITDA (TTM)
9.78
Stock Price (NASDAQ)
52-Week Performance
Revenue Breakdown By Source
BULL CASE
Unlocking A New Chapter of Digital Storytelling with Saeju Jeong
On June 16, 2025, Saeju Jeong, the Co-Founder and Executive Chairman of Noom–a $4.2 billion USD health app – was appointed to WEBTOON Entertainment Inc. (NASDAQ:WBTN)'s Board of Directors. With nearly two decades of experience in scaling mission-driven consumer technology businesses, Jeong has helped Noom achieve unicorn status, securing more than $650 million USD in capital and increasing annual revenue to $400 million USD, while also reaching millions of users globally to improve their health. The appointment of Jeong signals an impending leadership transformation for the company with 150 million monthly active users (MAUs). “He is a visionary entrepreneur and leader who innovates for positive change. His experience building an incredible consumer brand will be extremely valuable as we grow WEBTOON around the world,” said Junkoo Kim, Chief Executive Officer & Chairman of the Board.
Although WEBTOON’s current struggles persist, such as a Q1 net loss of $22 million USD, the challenges do not stem from lack of demand, rather from uneven execution. Jeong helped pivot Noom from hardware-centric fitness tracking to a software-focused health platform, creating a strategic shift of aligning product offerings with core mission. It paints him as the ideal candidate to help WEBTOON refocus on its strengths: its global creator ecosystem and IP monetization.
Saeju Jeong
Spoiler: Insider Trading Added USD $1.18M of Stock to Holdings
Insider trading has historically been a good indicator of shareholder confidence in a company’s future. Fortunately, WEBTOON Entertainment has seen a significant increase in their holdings due to an optimistic number of insiders in the past year. Over the last 12 months, insiders at WEBTOON Entertainment have been buying shares with no record of sales. The average purchase price was approximately $11.53, considerably higher than the current share price of $9.39 (as of July 4th, 2025), which suggests that insiders believe the shares were worth buying. Notably, the largest single insider purchase occurred when Founder Junkoo Kim bought shares valued at $510K at a price of $13.07 per share. These internal transactions over the past year are encouraging as it implies that insiders are not doubting the company’s future growth.
Solid Canvas for Financial Growth
With no debt and a strong cash balance of $550 million USD, WEBTOON is portrayed as investing in growth without any dilution. The company showcases a positive narrative in revenue trend with a 5.62% revenue growth, which is a substantial increase in top-line earnings. It also has an exceptional net margin of 26.35%, underscoring strong profitability and effective cost management. Japan, which accounts for more than 50% of its revenue, has seen a growth in YoY revenue of 9.4% in Q1and a triple-digit increase in IP adaptations, which now account for 20.7% of the revenue growth. This highlights the alignment of Saeju Jeong’s strategy of scaling high-margin areas.
Additionally, the platform has deployed AI-powered discovery tools which reduced user search time by 30%, and empowered its CANVAS UGC, a self-publishing platform for more than 150 million MAUs. These offer paths for cost-efficient expansions. Under Jeong’s leadership in improving unit economics, Noom was able to reduce user acquisition costs by 40%. His experience will support WEBTOON in applying similar strategies in untapped markets, such as Southeast Asia and Europe.
BEAR CASE
Another Disappointing Plot Twist Since WEBTOON's IPO
Known for its optimal vertical-scrolling format, WEBTOON Entertainment Inc. (NASDAQ:WBTN) was once the top digital content-sharing platform for both creators to publish serialized web-comics and users to read short comic episodes. However, since going public on June 27, 2024, WEBTOON’s financials have had an alarming number of plot twists that causes any investor to question the reliability of WEBTOON business model. For the past two years, WEBTOON’s monthly active users has declined, showcasing that each year its offerings draw in weaker demand. CFO David Lee has addressed the decline in users, crediting that the platform's recent security upgrades has impacted user flow.
Trading View
During the morning session on May 14, 2025, WEBTOON's shares fell 14.2% after the company reported its Q1 FY2025 financial results. The fall was in response to the company missing revenue and EPS expectations while adjusted EBITDA and adjusted EPS fell in response to rising operating expenses. Additionally, even though advertising and IP adaptations grew modestly, WEBTOON has been witnessing a steady decline in paid content sales—their largest revenue stream. The decline on May 14, 2025 is just one out of the forty instances where WEBTOON’s stock has moved greater than 5% in the last year, making the stock extremely volatile. As of May 2024, the stock has been trading 66% below its July 2024 52-week high of $23.85. The gravity of this decline should not be understated: if an investor bought $1000 of shares in July 2024, they would now be looking at stocks worth $352.61.
Tightening Margins and Burning Cash Puts Pressure on WEBTOON's Hopes to Reach a Profitable Episode
In Q1 FY2025, the company reported a 8.2% decline in operating margin from 4.3% in the same time last year. WEBTOON’s -10.5% 12-month GAAP operating margin indicates the company’s inability to derive revenue off of every dollar of sales after deducting variable costs. The negative operating margin is not a one-off situation; it has been a continuous repetitive pattern for the last three years, with operating margin averaging -6.9%. WEBTOON has been reporting large amounts of general and administrative expenses as a result of the costs of going public and increased marketing investments. While larger expenses may be a sign of high-growth, high-growth businesses with a repeated history of unprofitability need to be evaluated with extra scrutiny—one should ask if the excessive expenses foreshadow WEBTOON’s inability to remain relevant in the long-term. Furthermore, WEBTOON’s reported that in Q1 FY2025 the company burned through $19.9 million USD in cash, producing a -5.9% free cash flow margin. Prior to this report, the company had broken even for the last two years in free cash flow, leading to limited opportunities for WEBTOON to issue dividends and sustain self-funded growth.
Stock Story
Stock Story
Unlawful Webcomics and Cancellations Makes WEBTOONs Business Less of a “Page-Turner’
Any good company is capable of short-term success, but a great company is able to maintain sustained success over many years. While WEBTOON was once at the top of digital business service platforms, its recent financial performance has put the company at risk of becoming a smaller player in the industry. In addition, WEBTOON’s has been under waves of criticism and scrutiny as media outlets are exposing controversial web comics published on the platform. For instance, the comic-turned-drama The Elementary School Student I love faced outrage from South Korea and across the world as the web comic narrated a romance story between an elementary student and teacher. Furthermore, while monthly users are having difficulty finding new web-comics that aren't unlawful, they also find themselves saying goodbye to some of WEBTOON’s classics. In early July, the fan-favourite Webtoon The Wind Breaker was canceled after the author, Jo Yong-seok, confessed to committing plagiarism. As the comic was bringing in over 600 million views and has been running for over a decade, it is uncertain how WEBTOON would recover from such a poignant loss in their product line.
The Wind Breaker