Business · Companies · 1 day ago
Kakao shares rise after buyback plan, but analysts cut price targets
Kakao shares rose 9.68% this week, even as South Korea’s Kospi fell 11.71%.
The company said it would spend 150 billion won buying back its own shares and then cancel them.
Its third-quarter revenue and operating profit grew, while platform revenue rose 16%, helped by stronger advertising and shopping.
But 10 securities firms lowered their price targets, and the average target is now 42.37% below the level set during last year’s fourth-quarter outlook.
Analysts pointed to weaker content sales and a larger operating loss in AI services, saying Kakao still needs to show that AI can make money.
Kakao plans to start a KakaoTalk AI pilot next month, connecting features inside the messaging app with outside services.
Kakao aims to reach 10 million monthly users for its AI services this year and break even in its AI business by 2028.
Kakao shares rose 9.68% this week despite a sharp fall in the broader market, after the company announced a share buyback and cancellation plan.
The company will buy back and cancel 150 billion won in shares, bringing forward half of a larger plan intended for after its planned split.
Third-quarter revenue rose 6% year on year to 2.0867 trillion won, while operating profit increased 7% to 240.3 billion won.
Ten securities firms cut their Kakao price targets this week, citing uncertainty over AI monetisation and a slower recovery in content.
Analysts said sustained share gains will depend on Kakao showing that its AI business can generate revenue.
- Who
- Kakao, a South Korean technology company, and securities analysts covering its shares.
- What
- Kakao shares rose after it announced a 150 billion won buyback and cancellation plan, while analysts lowered price targets.
- When
- The report was published on November 7, 2026. Shares rose 9.68% during the week.
- Where
- South Korea; Kakao shares trade on the Korea Exchange.
- Why
- The buyback plan and growth in advertising and commerce supported the shares. Analysts cited uncertainty about AI monetisation and content recovery when lowering price targets.
Cautious securities analysts
Hanwha Investment & Securities analyst Kim So-hye
AI business prospects
Cautious securities analysts
Analysts said Kakao must prove its AI services can generate revenue, and some lowered valuations because the verification of agentic AI monetisation is taking longer.
Hanwha Investment & Securities analyst Kim So-hye
Kim said investors should focus on whether increased AI investment after the split leads to business results over the medium to long term.
Share outlook
Cautious securities analysts
Analysts cut price targets, with the consensus estimate falling to 46,682 won.
Hanwha Investment & Securities analyst Kim So-hye
Kim said the longer-term direction of expanded AI investment and shareholder returns deserves attention.
Kakao announced its 150 billion won share buyback and cancellation plan and reported its third-quarter results; its shares rose 10.65% that day.
Kakao shares closed at 32,300 won, up 100 won, or 0.31%, from the previous trading day.
Kakao shares gained 9.68% while the KOSPI fell 11.71%, and 10 securities firms lowered their price targets.
Kakao plans to begin a trial of Kanana Space, an AI service based on KakaoTalk.
Kakao plans to split into Kakao X and Kakao AI.
- Buyback and cancellation
- 150 billion won
- Kakao shares
- 32,300 won at the November 6 close
- Weekly share move
- Up 9.68%
- Third-quarter revenue
- 2.0867 trillion won, up 6% year on year
- Third-quarter operating profit
- 240.3 billion won, up 7% year on year
- Target-price consensus
- 46,682 won, down 42.37% from 81,000 won in the previous fourth-quarter earnings outlook
What people are saying
We lowered our target price-to-earnings ratio from 30 times to 25 times to reflect the delay in the verification of agentic AI monetisation.
Growth through new advertising placements and the entry of small and medium-sized advertisers is positive, but the direction of the share price will be determined entirely by Kanana Space.
We judge the recent move to have the character of a rotation, with some funds that had been concentrated in semiconductors over the past two years returning.
At the current low share price, I believe it is worth focusing on the medium- to long-term direction of increased AI investment and stronger shareholder returns after the split translating into actual business results, rather than short-term volatility based on AI agent business results.