Webtoon Entertainment could be a good add for investors looking for exposure to the creator economy, according to Goldman Sachs. The bank initiated the stock with a buy rating and a 12-month price target of $62. That forecast implies a whopping upside of 204%. Webtoon Entertainment went public last month and priced at $21 per share. WBTN 1M mountain WBTN 1-month chart “We view Webtoon as positively levered to a number of long-term secular growth themes within the web-comics market as well as the creator economy,” wrote Goldman analyst Eric Sheridan. “At current levels, we see a positive risk/reward skew on WBTN shares with the expansion into North America representing a large opportunity.” Going forward, Sheridan sees three main catalysts for the stock. First, he thinks Webtoon has exposure to several markets, including a $130 billion paid content market opportunity, the $477 billion advertising space and a $900 billion global entertainment industry. Sheridan also believes that Webtoon could grow revenue at a compound annual rate of 19% through 2029 to roughly $3.5 billion. This would be driven by continued paid content growth, acceleration of advertising revenue and the adaptation of its intellectual properties into different mediums such as TV shows and films. The analyst also remains optimistic that the entertainment company could achieve cost leverage and expand its margins going forward. “We forecast steady Adj. EBITDA margin expansion from ~3% in 2024 to ~14% in 2026 and ~17% in 2029 as the company benefits from mix shift dynamics, the optimization of revenue share agreements and from the relatively fixed nature of R & D and G & A costs,” Sheridan wrote.
