One-glance verdict
Undervalued
$86.01 our estimate vs market $15.68
Wall Street consensus: $17.50 (-79.7% lower than our fair-value estimate)
82% below our estimate, below the bear case
Fundamentals snapshot
DoubleDown Interactive Co., Ltd.
DDI · NMS · Communication Services · Electronic Gaming & Multimedia
Current price
$15.68
52-week range
$8.10 - $15.78
Market cap
$777.00M
Balance sheet
Healthy
70.96x Strong cushion
Net cash $516.32M. Interest coverage shows how many times profit covers the interest bill.
What stands out
2 Rewards
3 Risks
2 rewards · 3 risks
- Reward Returns 13.1% on equity, ahead of 33% of its peers.
- Reward Free cash flow was positive in 4/10 years.
- Risk Insider ownership is only 0.5% (peer median: 72.3%).
- Risk Stock trades 55.9% above its 5-year average P/E.
What this company does
DoubleDown Interactive Co., Ltd.
DoubleDown Interactive creates and sells online casino-style games on mobile phones and websites, with most of its earnings coming from these games. This is important because it means their success relies heavily on players continuing to enjoy and play their games, which can lead to steady income if people keep coming back.
How the company got here
DoubleDown Interactive was founded in 2008 in Seoul, South Korea, and initially focused on developing and publishing digital games for mobile and web platforms. A significant turning point was its acquisition of DoubleDown Interactive, LLC from International Gaming Technologies (IGT) in 2017, which became its primary revenue-generating entity. The company later changed its name from The8Games Co., Ltd. to DoubleDown Interactive Co., Ltd. in December 2019. More recently, it has expanded its reach through strategic acquisitions, such as WHOW Games GmbH in Germany and the iGaming company SuprNation.
What it actually does
DoubleDown Interactive creates and publishes digital games that are accessible on mobile devices and web browsers. These games are designed for casual players and offer entertainment through various interactive experiences. The company's games are often free-to-play, with revenue generated through in-game purchases, such as virtual chips used in casino-style games.
Social Casino Games
This segment is the historical backbone of DoubleDown Interactive and generates the majority of its revenue. It includes popular titles like "DoubleDown Casino," "DoubleDown Classic," and "DoubleDown Fort Knox." These games offer a social casino experience where players can enjoy casino-style games, like slots and card games, using virtual currency. Revenue in this segment comes from players purchasing these virtual chips to continue playing or to access more features within the games. This part of the business is a significant contributor to the company's overall income, making up a large portion of its total earnings.
iGaming
The iGaming segment represents DoubleDown Interactive's expansion into real-money online gambling. Through its subsidiary SuprNation, the company operates regulated online gambling sites in Western Europe. This segment offers a different type of gaming experience compared to social casino games, as it involves real money wagers. While it is a smaller part of the business compared to social casino games, it has shown rapid growth, with strategies focused on acquiring new players and optimizing investments in this sector. This segment is a key area for future growth and diversification for the company.
What management is betting on now
DoubleDown Interactive's management is focused on several key strategies. A major priority is increasing the direct-to-consumer (DTC) revenue within its social casino segment, aiming for a significant percentage of total social casino revenue to come directly from players. They are also focused on optimizing profitability in the iGaming segment, especially in markets like the UK where tax rates have increased, by adjusting game features and bonuses. Additionally, the company continues to explore strategic acquisitions to further expand its gaming portfolio and market presence, aiming to create new value for shareholders.
Price history
How the share price has moved
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Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2022 Q4
$50.52M
FY2023 Q4
$20.64M
Revenue
$308.86M
Net income
$100.89M
Diluted EPS
40.72
Operating cash flow
$20.83M
Free cash flow
$20.64M
Fetching…
Sources
Revenue
$321.03M
Net income
$-233.98M
Diluted EPS
-94.43
Operating cash flow
$50.79M
Free cash flow
$50.52M
Fetching…
Sources
Is it cheap or expensive?
Fair value $86.01 vs current price $15.68
Wall Street consensus is the average analyst price target: $17.50 (-79.7% lower than our fair-value estimate).
Our most-likely fair value is $86.01 a share — about 448.6% above today's price of $15.68, so the stock currently looks cheap (undervalued).
Is it drowning in debt?
Healthy
Net cash $516.3M - more cash than debt. Interest coverage 71.0x.
Net debt
$-516.32M
Interest coverage
70.96x
DoubleDown Interactive Co., Ltd.'s profit covers its interest bill about 71.0 times over. which is stronger than most peers shown here and 2 peers sit below 1x, which is the danger zone where profit does not fully cover the interest bill.
Healthy
Worse cushion
Baseline
Better cushion
DDI
BASELINE
DoubleDown Interactive Co., Ltd.
Total debt $37.45M Interest coverage 70.96x This is the baseline the peer rows are being compared against.
Total debt $2.50B Interest coverage 0.01x -100% vs DDI Carries about 7821.9x less debt cushion than DDI.
Total debt $2.68M Interest coverage 282.91x +299% vs DDI Carries about 4.0x more debt cushion than DDI.
Total debt $1.74M Interest coverage 846.90x +1,094% vs DDI Carries about 11.9x more debt cushion than DDI.
Total debt $4.46M Interest coverage -10.62x -100% vs DDI This peer has almost no interest-payment cushion compared with DDI.
What you should know
The case for and against DDI
2 Rewards
3 Risks
Rewards
-
Returns 13.1% on equity, ahead of 33% of its peers.
-
Free cash flow was positive in 4/10 years.
Risks
-
Insider ownership is only 0.5% (peer median: 72.3%).
-
Stock trades 55.9% above its 5-year average P/E.
-
Forward P/E (6.4x) is higher than trailing (6.2x) - earnings are expected to drop.
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
6.22x
Forward P/E
6.43x
P/B
0.77x
P/S
2.04x
EV/EBITDA
1.72x
PEG ratio
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Profitability
How much profit each dollar creates
Gross margin
73.4%
Operating margin
38.7%
Net margin
32.9%
ROE
13.1%
ROA
8.7%
Health
Liquidity and balance-sheet strength
Debt / equity
0.04x
Current ratio
18.67x
Quick ratio
18.57x
Total debt
$37.45M
Total cash
$553.76M
Growth
How the business has been compounding
Revenue TTM
$1.35B
Revenue 5Y CAGR
3.1%
EPS TTM
2.52
EPS 5Y CAGR
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Cash flow
How much cash the business throws off
Operating CF TTM
$267.58M
Free CF TTM
$136.48M
FCF margin
10.1%
Dividend
Shareholder payout
Yield
0.0%
Payout ratio
0.0%
Last ex-div date
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