One-glance verdict
Undervalued
$338.83 our estimate vs market $68.31
80% below our estimate, below the bear case
Fundamentals snapshot
Gravity Co., Ltd.
GRVY · NGM · Communication Services · Electronic Gaming & Multimedia
Current price
$68.31
52-week range
$54.54 - $76.00
Market cap
$474.68M
Balance sheet
Healthy
282.91x Strong cushion
Net cash $487.13M. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
2 Risks
3 rewards · 2 risks
- Reward Revenue grew 40.0% last year.
- Reward Returns 13.2% on equity, ahead of 50% of its peers.
- Risk Stock trades 176550.4% above its 5-year average P/E.
- Risk Operating margin compressed from 22.8% to 14.1% over 3 years.
What this company does
Gravity Co., Ltd.
Gravity Co., Ltd. makes online and mobile games, like the popular "Ragnarok" series, and also sells character merchandise. Their money mostly comes from people buying these games and in-game items, which is important because it shows how popular their game worlds are with players.
How the company got here
Gravity Co., Ltd. was founded in April 2000 and quickly became known for its massively multiplayer online role-playing game (MMORPG), Ragnarok Online. The company made a significant mark in 2005 by becoming the first South Korean gaming firm to list on the NASDAQ stock exchange. Initially focused on PC games, Gravity has strategically shifted its emphasis towards mobile gaming since 2011, a move that has become a primary driver of its revenue. The company is a majority-owned subsidiary of the Japanese publisher GungHo Online Entertainment, which provides a stable foundation and strategic integration.
What it actually does
Gravity Co., Ltd. is a video game developer and publisher that creates and distributes online and mobile games across the globe. While best known for its long-running Ragnarok franchise, the company also develops and publishes other game titles. Beyond gaming, Gravity extends its intellectual property (IP) into character-based merchandise and animation, and also offers system development and maintenance services to third parties.
Mobile Games
This is Gravity's largest source of income, typically accounting for 75% to 85% of its total revenue. The company generates most of its money from in-app purchases within its mobile titles, such as Ragnarok Origin and Ragnarok X: Next Generation. Gravity develops these games either in-house or by outsourcing to other developers, and also publishes games licensed from third parties. This segment includes a wide variety of mobile games, from MMORPGs to other genres.
Online Games
This segment includes Gravity's traditional PC-based massively multiplayer online role-playing games (MMORPGs), like the original Ragnarok Online. Revenue here comes from a combination of subscription fees paid by players and microtransactions within the games. Gravity also earns income through licensing and royalty fees from third-party developers who create games based on Gravity's intellectual property. While not as large as the mobile segment, this remains a significant contributor to the company's overall business.
Other
This segment encompasses Gravity's diverse range of activities beyond its core online and mobile game development. It includes the creation and sale of character-based merchandise, such as dolls and stationery, and also animation. Additionally, Gravity provides system development and maintenance services, as well as system integration services, to other companies. This segment also includes console games and IPTV titles, broadening the company's reach across different gaming platforms and media.
What management is betting on now
Gravity's current strategy focuses on expanding its Ragnarok intellectual property (IP) into a broader ecosystem across multiple platforms and regions. Management is investing in developing new games, including console and PC titles, and exploring new technologies like AI and blockchain for game development. The company is also diversifying its revenue streams by publishing third-party games and expanding its reach into Western markets, aiming to become a global game company with a strong IP foundation.
Price history
How the share price has moved
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Loading price history…
Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2015 Q4
$-5.47M
FY2016 Q4
$1.87M
Revenue
$42.70M
Net income
$207.00K
Diluted EPS
—
Operating cash flow
$2.02M
Free cash flow
$1.87M
Fetching…
Sources
Revenue
$30.50M
Net income
$-14.51M
Diluted EPS
—
Operating cash flow
$-5.11M
Free cash flow
$-5.47M
Fetching…
Sources
Is it cheap or expensive?
Fair value $338.83 vs current price $68.31
Our most-likely fair value is $338.83 a share — about 396.0% above today's price of $68.31, so the stock currently looks cheap (undervalued).
Is it drowning in debt?
Healthy
Net cash $487.1M - more cash than debt. Interest coverage 282.9x.
Net debt
$-487.13M
Interest coverage
282.91x
Gravity Co., Ltd.'s profit covers its interest bill about 282.9 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
GRVY
BASELINE
Gravity Co., Ltd.
Total debt $2.69M Interest coverage 282.91x This is the baseline the peer rows are being compared against.
Total debt $37.45M Interest coverage 70.96x -75% vs GRVY Carries about 4.0x less debt cushion than GRVY.
Total debt $2.50B Interest coverage 0.01x -100% vs GRVY Carries about 31185.9x less debt cushion than GRVY.
Total debt $1.74M Interest coverage 846.90x +199% vs GRVY Carries about 3.0x more debt cushion than GRVY.
Total debt $4.46M Interest coverage -10.62x -100% vs GRVY This peer has almost no interest-payment cushion compared with GRVY.
What you should know
The case for and against GRVY
3 Rewards
2 Risks
Rewards
-
Revenue grew 40.0% last year.
-
Returns 13.2% on equity, ahead of 50% of its peers.
-
Free cash flow was positive in 4/10 years.
Risks
-
Stock trades 176550.4% above its 5-year average P/E.
-
Operating margin compressed from 22.8% to 14.1% over 3 years.
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)
8.02x
Forward P/E
—
P/B
0.90x
P/S
0.00x
EV/EBITDA
-7.56x
PEG ratio
—
Profitability
How much profit each dollar creates
Gross margin
32.0%
Operating margin
14.1%
Net margin
15.3%
ROE
13.2%
ROA
6.4%
Health
Liquidity and balance-sheet strength
Debt / equity
0.01x
Current ratio
7.20x
Quick ratio
6.95x
Total debt
$2.69M
Total cash
$489.83M
Growth
How the business has been compounding
Revenue TTM
$154.95M
Revenue 5Y CAGR
-5.9%
EPS TTM
8.52
EPS 5Y CAGR
-6.7%
Cash flow
How much cash the business throws off
Operating CF TTM
$-11.80M
Free CF TTM
$52.20M
FCF margin
33.7%
Dividend
Shareholder payout
Yield
4.7%
Payout ratio
37.9%
Last ex-div date
2026-06-30