What Happened?
A number of stocks jumped in the afternoon session after a new trade agreement between the United States and Japan spurred a broad market rally. The positive sentiment swept across markets after it was announced the U.S. and Japan had reached a new trade deal. The agreement included a 15% tariff on Japanese goods imported into the U.S. and a commitment from Japan to invest $550 billion in the U.S. and open its markets to American cars and agricultural products. This development boosted investor confidence and contributed to a widespread rally, lifting stocks across many sectors. The Dow Jones Industrial Average and the S&P 500 both posted gains, creating a favorable environment that likely benefited individual stocks.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.
Among others, the following stocks were impacted:
- Dental Equipment & Technology company Envista (NYSE: NVST) jumped 3.8%. Is now the time to buy Envista? Access our full analysis report here, it’s free.
- Outpatient & Specialty Care company agilon health (NYSE: AGL) jumped 4.1%. Is now the time to buy agilon health? Access our full analysis report here, it’s free.
- IT Distribution & Solutions company Ingram Micro (NYSE: INGM) jumped 4.1%. Is now the time to buy Ingram Micro? Access our full analysis report here, it’s free.
- Digital Media & Content Platforms company WEBTOON (NASDAQ: WBTN) jumped 5.3%. Is now the time to buy WEBTOON? Access our full analysis report here, it’s free.
- Media company Warner Bros. Discovery (NASDAQ: WBD) jumped 3.8%. Is now the time to buy Warner Bros. Discovery? Access our full analysis report here, it’s free.
Zooming In On WEBTOON (WBTN)
WEBTOON’s shares are extremely volatile and have had 39 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 2 months ago when the stock dropped 14.2% on the news that the company reported weak first quarter 2025 results: its revenue and EPS missed.
The shortfall was driven by a modest decline in Paid Content sales, which remained the company's largest revenue stream, even as Advertising and IP Adaptations grew modestly. Adjusted EBITDA fell a lot from the prior year, and margins shrank, as operating expenses soared. These cost increases overwhelmed the modest top-line performance and pushed adjusted earnings per share down. For the second quarter, WEBTOON guided to modest low single-digit revenue growth and roughly break-even EBITDA margin (0.1%-1.6%), signaling continued pressure on profitability. Overall, this was a weaker quarter.
WEBTOON is down 22.1% since the beginning of the year, and at $10.59 per share, it is trading 51.3% below its 52-week high of $21.74 from July 2024. Investors who bought $1,000 worth of WEBTOON’s shares at the IPO in June 2024 would now be looking at an investment worth $460.43.
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