Bilibili’s Hold Rating Maintained Amid Strong Advertising Growth and Demanding Valuation

Brian Gong, an analyst from Citi, maintained the Hold rating on Bilibili (BILI – Research Report). The associated price target is $23.00.

Brian Gong has given his Hold rating due to a combination of factors related to Bilibili’s financial performance and market position. The company’s first-quarter results exceeded expectations primarily due to effective operational expense management. Looking ahead to the second quarter, advertising growth is anticipated to remain strong, particularly in the e-commerce sector, despite some seasonal fluctuations in gaming revenue.
While Bilibili is making strides in improving its operating margins, with projections for further enhancements, the overall revenue growth appears lackluster. The advertising growth narrative is already well-understood by investors, and the stock’s valuation remains demanding at 26 times the estimated 2025 earnings. Consequently, despite the positive margin outlook, the top-line momentum does not seem compelling enough to warrant a more favorable rating, leading to the decision to maintain a Hold recommendation.