[Click eStock] "Nomus, High Growth Continues... Still Undervalued Zone"

DS Investment & Securities analyzed on the 17th that Nomus continues its high growth trend and is currently in an undervalued range.

In the fourth quarter of last year, Nomus recorded sales of 68.9 billion KRW, a 62.9% increase compared to the previous year, and achieved an operating profit of 8.1 billion KRW, turning profitable. However, profitability was somewhat lower than initially expected due to one-time costs related to stock compensation expenses and listing fees.

Daehyung Cho, a researcher at DS Investment & Securities, stated, “Considering that these costs typically occur at the end of the year for newly listed companies, attention should be paid to the sales growth that meets expectations rather than short-term profitability.”

Although the increase in the proportion of domestic performances in the fourth quarter led to a rise in cost ratio, it is expected to be offset by the leverage effect from high sales growth across all business sectors by 2025.

Nomus’s business expansion strategy is also positive. Since The Boyz’s entry in November last year, the number of Fromm subscribers has increased to around 300,000. Additionally, plans are underway to enhance payment convenience to secure Chinese subscribers. Alongside this, the company is actively pursuing IP acquisition.

Researcher Cho evaluated, “The business structure provides comprehensive solutions including overseas tours, platforms, MD, and content production, generating synergy among businesses,” and added, “Due to the platform’s characteristic of not being biased toward specific agencies, it is advantageous for securing IPs of small and medium-sized artists.”

Performance growth is also expected in 2025. DS Investment & Securities forecasts Nomus’s sales for this year to be 109.7 billion KRW (+59.1% year-on-year) and operating profit to be 28.2 billion KRW (+247.1% year-on-year). Researcher Cho explained, “Additional fourth-quarter performance pipelines are being secured, and a virtuous cycle structure has been established through platform sales growth driven by the expansion of artist entries,” adding, “With the overseas tour schedule secured up to the third quarter so far, high growth is expected to continue.”

Accordingly, the analysis suggests that Nomus’s stock price still remains in an undervalued range. Based on the current stock price, the expected price-to-earnings ratio (PER) for 2025 is around 11 times, which is considered a low valuation even reflecting conservative estimates.