(Data Sources: Google Trends, Google Finance)Īs you can see, search interest spikes usually proceed or concur with price spikes in GRVY. That said, we can clearly see below that worldwide "Thor Ragnarok" search interest is correlated with price changes for GRVY: It is worth pointing out that nobody outside of Google truly knows how that filter works. Thus, I've added Google's "Online Game" filter in order to hone in on Gravity's main game, which uses AI to filter results. Our search term will be "Ragnarok Online", which, by itself, could cause misleading results due to "Thor Ragnarok", among other convoluted terms. Particularly when it comes to companies that generate the bulk of their revenue from one item.īefore we started, it is worth pointing out a few potential issues with Google Trends data. Google Trends Search Volume and Gravity Co.įrom what I've found, Google Trends is perhaps one of the most undervalued tools investors can use to track expected forward earnings. In my opinion, this is best done via Google Trends. Thus, we must focus almost entirely on expected future demand trends for valuing the company.
Further, if Gravity Co.'s 2017-2019 growth trend continues, the stock is extremely undervalued. If you believe interest in the game will continue to fade, it is entirely possible the company will not generate a profit. On a TTM basis, the stock is trading at a very low P/E of 5X, but on a quarterly basis, it is at 8.5X. However, in 2016, the firm had another wildly successful launch and the stock rose around 6000%, only to fall 63% from its May 2019 peak to today on the back of slower-than-expected user growth.ĭepending on how you measure it, the stock is cheap. The company was launched in 2002 and was widely successful for most of the early 2000s, only to lose over 90% of its value from 2005 (when the ADR began trading) to 2009. The company has done side projects with non-Ragnarok games, but the vast majority of its revenue comes from the brand.Īs is true with many "one-trick pony"-type game companies, Gravity has had many ups and downs through the years as players come and go, creating immense volatility for its stock price. This includes multiple online MMORPG games and mobile games. ( NASDAQ: GRVY) is a South Korean online gaming corporation that owns the Ragnarok franchise.
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