Yang Liu CFA, an analyst from Morgan Stanley, maintained the Hold rating on Bilibili. The associated price target was raised to $22.00.
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Yang Liu CFA has given his Hold rating due to a combination of factors influencing Bilibili’s financial outlook. The company’s game revenue is projected to decline due to a high base effect from the previous year, particularly from the game San Mou. Although this decline is expected, the stability in user retention and the upcoming overseas launch of San Mou could provide some support.
On the other hand, Bilibili’s advertising segment shows promise with a projected 20% year-over-year growth, surpassing expectations. This growth is driven by increased customer numbers and improved efficiencies, alongside a more diversified advertising inventory. Despite these positive aspects, the valuation remains relatively high at approximately 25 times the 2026 estimated P/E, which is considered fair given the company’s profit growth outlook. Consequently, the Hold rating reflects a balanced view of potential growth and current valuation levels.