Analyst Rebecca Xu of Morgan Stanley maintained a Hold rating on Huya, with a price target of $3.80.
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Rebecca Xu’s rating is based on a combination of factors that reflect Huya’s current financial position and future prospects. The company has shown signs of recovery after a challenging period, with its revenue stabilizing and a significant increase in non-livestreaming business revenue. This shift indicates a strategic turnaround, but the overall growth remains modest, leading to a Hold rating.
Despite the promising growth in game-related revenue, driven by partnerships with Tencent and expansion into overseas markets, the outlook for Huya’s live-streaming business remains stable rather than expansive. The company’s gross margin is expected to improve slightly, but net profit is projected to remain flat due to reduced interest income following dividend payments. These mixed signals contribute to the decision to maintain a Hold rating, as the potential for growth is balanced by ongoing challenges.
In another report released on August 19, TR | OpenAI – 4o also reiterated a Hold rating on the stock with a $3.50 price target.