In This Article:
What Happened?
Shares of digital storytelling platform WEBTOON (NASDAQ:WBTN) fell 14.2% in the morning session after the company reported weak first quarter 2025 results: its revenue and EPS missed. The shortfall was driven by a modest decline in Paid Content sales, which remained the company's largest revenue stream, even as Advertising and IP Adaptations grew modestly. Adjusted EBITDA fell a lot from the prior year, and margins shrank, as operating expenses soared. These cost increases overwhelmed the modest top-line performance and pushed adjusted earnings per share down.
For the second quarter, WEBTOON guided to modest low single-digit revenue growth and roughly break-even EBITDA margin (0.1%-1.6%), signaling continued pressure on profitability. Overall, this was a weaker quarter.
The shares closed the day at $8.04, down 18.5% from previous close.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy WEBTOON? Access our full analysis report here, it’s free.
What The Market Is Telling Us
WEBTOON’s shares are extremely volatile and have had 40 moves greater than 5% over the last year. But moves this big are rare even for WEBTOON and indicate this news significantly impacted the market’s perception of the business.
WEBTOON is down 40.3% since the beginning of the year, and at $8.11 per share, it is trading 66% below its 52-week high of $23.85 from July 2024. Investors who bought $1,000 worth of WEBTOON’s shares at the IPO in June 2024 would now be looking at an investment worth $352.61.
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