SK Securities analyzed that if the new services related to artificial intelligence (AI) take root in the market, the stock price of Naver could rebound quickly again. It maintained a target price of 270,000 won and an investment opinion of 'buy.' The closing price of Naver on the previous transaction day was 202,500 won.
SK Securities projected that in the fourth quarter of last year, Naver's revenue would reach 2.77 trillion won, a 9.1% increase from the previous year, while operating profit is expected to rise by 32.4% to 536.7 billion won. The net profit of the controlling shareholders is anticipated to increase by 44.2% compared to the previous year, amounting to 453.1 billion won.
Nam Hyo-ji, a Research Institute analyst at SK Securities, noted, 'Continuing from the previous quarter, the advertising business is in a recovery phase.' She explained that 'despite the difficult market conditions, the performance of the search platform is growing, and the high efficiency shown by the advanced targeting of feed ads has allowed the growth of display advertising (DA) to continue.'
In the institutional sector of commerce, despite weak consumer sentiment, the growth in transaction value was driven by improvements in delivery quality and increased arrival guarantee usage. The marketing expense is expected to rise by 12.8% year-on-year to 402.2 billion won, bolstered by promotions in Plus Store, Comic-Con marketing for webtoons, and expansions in payment and membership.
Naver's advertising business is expected to continue its growth this year. Nam noted that 'the commerce sector launched the AI-based hyper-personalized shopping 'Naver Plus Store' beta service last October and plans to release a separate app in the first half of this year.' She stated, 'The advertising sector can achieve cost efficiency and expand the pool of advertisers through the refinement of integrated platform tools.'
Recently, Naver's stock price has been undergoing short-term adjustments. In this regard, Nam stated, 'Amid deteriorating consumer sentiment, both the advertising and commerce markets are sluggish, but Naver is exceeding market growth rates based on new services incorporating AI.'
She added, 'It is important for Naver Plus Store and AD Boost (Voost) to take root,' stating that 'if revenue efficiency verifies, the stock price will rebound quickly again.'