One-glance verdict
Undervalued
$67.35 our estimate vs market $13.00
Wall Street consensus: $18.05 (-73.2% lower than our fair-value estimate)
81% below our estimate, below the bear case
Fundamentals snapshot
DoubleDown Interactive Co., Ltd.
DDI · NMS · Communication Services · Electronic Gaming & Multimedia
Current price
$13.00
52-week range
$8.10 - $13.28
Market cap
$644.19M
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: 72.4%).
- Risk Stock trades 29.3% above its 5-year average P/E.
What this company does
DoubleDown Interactive Co., Ltd.
DoubleDown Interactive creates popular casino-style games, like virtual slot machines, that people play on their phones and computers. The company makes its money when players buy virtual chips and other items inside the games, not from real-money gambling. This business model is important because its success depends on keeping a large number of players consistently entertained and willing to spend small amounts over time.
How the company got here
Founded in South Korea in 2008, DoubleDown Interactive started as a developer of casual games. A key moment was the 2010 launch of 'DoubleDown Casino' on Facebook, making it an early player in the social casino space. The company was later acquired by DoubleU Games, another South Korean game developer, which also acquired the US-based DoubleDown Interactive and combined them. To expand its offerings and reach, the company has made strategic acquisitions (buying other companies), such as the European gaming studios SuprNation and WHOW Games.
What it actually does
DoubleDown Interactive creates and publishes digital games that you can play on your phone or on the web. Think of it like a casino in your pocket, but for fun, not for real money gambling in its main games. Their most popular games, like DoubleDown Casino, let players enjoy casino-style games such as slots and poker. While the games are free to play, the company makes money when players choose to buy virtual items, like extra chips, to keep playing or access special features.
Social Casino Games
This is the company's largest and most profitable business, making up the majority of its revenue (the total money it brings in). This segment includes popular free-to-play games like DoubleDown Casino, DoubleDown Fort Knox, and DoubleDown Classic Slots. Players don't wager real money; instead, they can purchase virtual chips if they run out of the free ones provided. This model is often called "freemium"—the game is free, but premium features are available for purchase.
iGaming
This is a smaller but growing part of the company that involves real-money online gaming. Through its acquisitions of companies like SuprNation and WHOW Games, DoubleDown operates several iGaming sites in Europe. Unlike the social casino games, players on these platforms can gamble with actual money. This segment represents the company's effort to diversify (spread out its business activities) beyond its core social casino market.
What management is betting on now
The company's leadership is focused on a two-part strategy: using its profitable social casino games to generate cash while expanding its real-money iGaming business. A major priority is growing their direct-to-consumer business, which means getting more players to make purchases directly through their own websites rather than through app stores, which take a cut of the sales. They also continue to look for opportunities to acquire other gaming companies to further diversify their game portfolio and expand into new regions.
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 $67.35 vs current price $13.00
Wall Street consensus is the average analyst price target: $18.05 (-73.2% lower than our fair-value estimate).
Our most-likely fair value is $67.35 a share — about 418.1% above today's price of $13.00, 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 $2.51B Interest coverage 0.01x -100% vs DDI Carries about 7821.9x less debt cushion than DDI.
Total debt $2.66M 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 $5.45M 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: 72.4%).
-
Stock trades 29.3% above its 5-year average P/E.
-
Forward P/E (5.3x) is higher than trailing (5.2x) - 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)
5.16x
Forward P/E
5.33x
P/B
0.64x
P/S
1.70x
EV/EBITDA
0.84x
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
—
Payout ratio
0.0%
Last ex-div date
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