Bilibili (NASDAQ:BILI) shares are under pressure today after the Chinese online entertainment services provider’s third-quarter results fell short of expectations. Revenue remained essentially flat at $795.7 million, lagging expectations by $24.7 million. EPS of -$0.29 missed the cut by $0.02.
Bilibili is experiencing gains in user engagement and its user base. During the quarter, Advertising revenue increased by 21%, and revenue from Value-added services increased by 17%. Its number of average daily active users (DAUs) increased by 14% to 102.8 million. Further, the average daily time spent by users on its platform rose to a high of 100 minutes.
The company is also maintaining a focus on driving its operational performance. In Q3, adjusted net loss narrowed by 51% to $118.3 million. Moreover, Bilibili generated positive operating cash flow during the quarter.
Still, Bilibili’s revenue from mobile games declined by 33% to $135.9 million as certain new games fell short of expectations. Consequently, Bilibili expects net revenue for Fiscal year 2023 to land at the lower end of the RMB 22.5 billion to RMB 23.5 billion range.
Is BILI a Good Stock to Buy?
Overall, the Street has a Moderate Buy consensus rating on Bilibili. The average BILI price target of $19.07 points to a substantial 43% potential upside in the stock. That’s after a nearly 51% slide in the company’s share price so far this year.
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