NEW YORK (TheStreet) -- You've heard it, all the negative publicity over King Digital Entertainment'sinitial public offering.

One-hit wonder. What the hell is Candy Crush Saga?

Well, when you stop carping and actually look at the company's F-1 IPO filing, you see a healthy business model.

I'm not saying I'm buying shares of the stock on Day 1 Wednesday when it starts trading under the ticker symbol of "KING," but the assumption -- yes, mine, too -- was that King was a joke of an IPO. But is it?

In the F-1 filing, you'll see that King had annual 2013 revenue of $1.88 billion. This dwarfs 2012's revenue figure of just $165 million, and actually isn't all that far from the $3.8 billion in revenue Electronic Art's (EA) - Get Report had in 2013. At least when you consider how long each company has been established. 

Furthermore, King has been cash flow-positive since 2005, currently has no debt and has $408 million in cash. 

In 2013, earnings before interest, taxes, depreciation and amortization and adjusted margins also rang in at an impressive 44%, while the company earned $4.65 per share for the year. 

So by all accounts, this company actually has some sexy metrics and by most standards could have a reasonable valuation for its current performance, pending on the opening price of the stock. 

WATCH: King Digital IPO Has Investors Waiting to Taste Candy Crush

King Digital is looking to price between $21 to $24, giving the company a valuation of roughly $7.5 billion. In comparison, Electronic Arts currently has a market cap of roughly $9 billion, Activision Blizzard (ATVI) - Get Report has a market cap of $14.6 billion and Take-Two Interactive Software (TTWO) - Get Report has a market cap of $2.1 billion. 

Despite the high margins, solid free-cash flow, no debt, plenty of cash and high revenue growth, there lies one problem with this stock: Candy Crush Saga

The game accounted for 78% of the company's total gross bookings. An additional 17% of total gross bookings came from just two other games (Pet Rescue Saga and Farm Heroes Saga). In all, 95% of the company's total gross bookings are comprised of three games. 

Now, if Pet Rescue Saga and Farm Heroes Saga were to quickly gain more traction, this may not be a bad thing. You could also argue that with many people hooked on Candy Crush, the company will develop another addictive game.

That's the challenge -- what's next?

Unlike Electronic Arts -- which always has Fifa, Madden, Battlefield among others -- King doesn't have multiple franchises of popular games. It really has the one blockbuster hit that took the world by storm. 

Based on 2013's metrics, the stock has a reasonable valuation given its free-cash flow and profitability. If King can create another Candy Crush, then it would be safe to say shares will be undervalued. 

In a way, you could view the company (and its stock) as a binary event. In other words, the stock will rapidly decline if it fails to deliver future games with a high acceptance rate, or the stock will rapidly appreciate if future games do have a high acceptance rate. 

King's advantage over its competition is easy: mobile gaming. Mobile gaming continues to experience strong growth, and we've seen the ability for them to go viral. It also means very low overhead for the company. King can even have several duds, so long as it releases that one blockbuster every now and then. 

So it's worth doing the research in and keeping an eye on this one. 

-- Written by Bret Kenwell in Petoskey, Mich.

 At the time of publication, the author held no position in any stocks mentioned.

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This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.

Bret Kenwell currently writes, blogs and also contributes to Robert Weinstein's Weekly Options Newsletter.