SOOP's shares have dropped more than 12% during trading after the company reported second-quarter earnings that fell significantly short of market expectations, compounded by a downgrade in target stock prices from analysts. The decline is attributed to weak performance in the content advertising sector and one-time expenses impacting results.
As of 2:05 PM on August 3, SOOP's stock was trading at 41,900 won, down 12.71% from the previous trading day, according to the Korea Exchange.
The stock's decline is linked to disappointing earnings. For the second quarter of this year, SOOP reported consolidated revenue of 103.8 billion won and an operating profit of 12.6 billion won, marking decreases of 11.2% and 57.9%, respectively, compared to the same period last year.
The company cited poor performance in its content advertising business and one-time costs related to a tax investigation as the main reasons for the earnings decline.
Following the earnings announcement, analysts have been quick to lower their target prices. Meritz Securities reduced its target price from 76,000 won to 51,000 won while maintaining a 'Hold' investment rating.
Lee Hyo-jin, an analyst at Meritz Securities, stated, "While the shareholder return policy may support the stock price, the impact could be limited if the profitability of core businesses does not meet expectations."
He added, "In the third quarter, the removal of one-time costs may allow for improved results, but given the domestic market-focused business structure, it will be challenging to find clear growth drivers."
SOOP plans to pursue a rebound in performance in the second half of the year by attracting new streamers, improving user interface and experience, and launching new brands.
* This article has been translated by AI.
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