Last Update 11 Dec 25

Fair value Increased 4.08%

JOYY: Accelerating Advertising Momentum Will Drive Stronger Q4 Performance

Analysts nudged up their price target for JOYY from approximately $69.82 to about $72.67, citing stronger than expected Q3 results and a more robust, accelerating advertising business that supports higher revenue growth assumptions, despite slightly lower margin forecasts.

Analyst Commentary

Following the Q3 report, bullish analysts highlighted that the performance reinforced confidence in JOYY's core operations and justified higher valuation multiples, particularly for the advertising segment. Updated models now reflect a stronger revenue trajectory into Q4 and beyond, even as execution risks and competitive pressures remain in focus.

Bullish Takeaways

Bullish analysts see Q3 as a solid beat that validates JOYY's ability to execute on growth initiatives, supporting higher near term and medium term revenue forecasts.
Advertising momentum is viewed as a key driver of potential upside, with expectations that ad revenue growth could accelerate significantly in Q4, which would improve the quality and visibility of the revenue mix.
The uplift in core business valuation, driven by a brighter advertising outlook, is cited as suggesting room for further multiple expansion if JOYY sustains higher growth and monetization efficiency.
Higher price targets across research models are described as signaling growing conviction that JOYY can deliver growth above consensus expectations, even with only modest improvements in margins.

Bearish Takeaways

Bearish analysts caution that, despite higher price targets, rating stances remain measured, reflecting uncertainty around the durability of advertising strength beyond the near term.
Execution risk is flagged around maintaining 60 percent plus year over year ad growth, particularly if macro conditions or competitive dynamics weigh on advertiser budgets.
Some models still incorporate relatively conservative margin assumptions, indicating concerns that increased investment needs in user acquisition and product may cap profitability upside.
Valuation, while lifted, is described by cautious analysts as more tightly linked to continued acceleration in advertising, which could leave the stock more vulnerable if growth normalizes faster than expected.

What's in the News

Declared a fourth quarter 2025 cash dividend of USD 0.97 per ADS, or USD 0.0483 per common share, payable on January 13, 2026 to shareholders of record on January 2, 2026, with an ex dividend date also on January 2, 2026 (company announcement)
Issued fourth quarter 2025 net revenue guidance in the range of USD 563 million to USD 578 million, reflecting current views on market conditions and macroeconomic uncertainties (company guidance)
Completed its previously announced share repurchase program, buying back a total of 1,700,000 shares, or about 3.29 percent of shares outstanding, for USD 88.6 million, including 870,000 shares repurchased between July 1, 2025 and November 19, 2025 (buyback update)

Valuation Changes

The fair value estimate has risen slightly from approximately $69.82 to about $72.67, reflecting a modestly higher intrinsic value assessment for JOYY shares.
The discount rate has edged down marginally from about 7.82 percent to roughly 7.80 percent, indicating a slightly lower assumed risk profile in the updated model.
The revenue growth assumption has increased significantly from roughly 4.84 percent to about 8.58 percent, signaling a materially stronger top line outlook.
The net profit margin assumption has declined moderately from about 11.94 percent to roughly 10.97 percent, incorporating expectations for somewhat lower profitability.
The future P/E multiple has risen slightly from around 14.59x to approximately 14.88x, implying a modest expansion in the valuation multiple applied to forward earnings.

Investor expectations for global expansion, user growth, and margin improvement may be too optimistic given regulatory, competitive, and demographic challenges.
Market optimism overlooks risks from increased compliance costs, competition, and potential revenue overestimation in entertainment and ad tech segments.
Strategic focus on AI-powered user growth, operational discipline, and capital returns positions JOYY for sustained revenue expansion, margin improvements, and long-term competitive advantage.

Catalysts

About JOYY

Engages in the provision of social product matrix and communication technology.What are the underlying business or industry changes driving this perspective?

Investors are likely overestimating JOYY's ability to sustain rapid global expansion and user growth as they expect increased internet penetration and mobile adoption to continue driving consistent double-digit increases in global MAUs and revenues, but this growth may be challenged by heightened regulatory risks and demographic headwinds in key markets, impacting future revenue upside.
The current valuation appears to price in compounding improvements in net margins, as investors expect ongoing advances in AI-driven content recommendation, monetization, and advertising technologies to continually drive higher user engagement, ARPU, and operating efficiency; however, execution and competitive pressures could prevent margin expansion from fully materializing.
The market seems to assume that JOYY's successful international expansion-especially in developed markets and Southeast Asia-will remain unimpeded by geopolitical issues or regulatory tightening regarding data privacy and cross-border data flows, which could materially increase compliance costs and limit scaling, impacting long-term earnings growth.
Expectations are high that the structural tailwinds from the global shift towards digital entertainment, livestreaming, and interactive platforms will prevent saturation risk, with JOYY enjoying persistent user base and revenue growth despite rising competition and the risk of user fatigue in core entertainment segments-this could lead to overstated revenue forecasts.
Investors appear to be pricing in sustained acceleration from JOYY's emerging ad tech business and successful investments in new monetization channels, without accounting for the risk of declining pricing power, increased competition from established global platforms, and regulatory headwinds, all of which could constrain top-line and bottom-line growth.

JOYY Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming JOYY's revenue will grow by 4.0% annually over the next 3 years.
Analysts assume that profit margins will shrink from 82.3% today to 11.3% in 3 years time.
Analysts expect earnings to reach $267.8 million (and earnings per share of $4.56) by about September 2028, down from $1.7 billion today. However, there is a considerable amount of disagreement amongst the analysts with the most bullish expecting $306 million in earnings, and the most bearish expecting $174 million.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 11.6x on those 2028 earnings, up from 1.8x today. This future PE is lower than the current PE for the US Interactive Media and Services industry at 16.9x.
Analysts expect the number of shares outstanding to decline by 4.58% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 7.58%, as per the Simply Wall St company report.

JOYY Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

JOYY's ad tech business, BIGO Ads, is experiencing robust and accelerating growth-up 29% year-over-year and 9% quarter-over-quarter in Q2 2025-with management highlighting high advertiser demand, ongoing expansion into new verticals and geographies, and a flywheel effect from enhanced algorithms, which could materially increase revenue and profit over the long term.
The company is successfully localizing and growing its user base in developed regions (Europe, North America) and emerging markets (Southeast Asia, MENA), supported by AI-driven content and expansion into new social product lines, pointing to the potential for sustained user growth, higher engagement, and incremental monetization-impacting both top-line revenue and net user growth.
Management is focusing on high-quality operations and disciplined cost control, leading to a significant improvement in non-GAAP operating income (+27.9% YoY) and net margins, with gross margin improvements driven by higher-margin non-livestreaming revenues and steady cost discipline, which could support long-term earnings growth.
The company's strategic investment in AI and proprietary technology for content recommendation, user targeting, and real-time translation is creating differentiators that increase user engagement, conversion, and ARPU, while enabling JOYY to build durable competitive advantages that are likely to drive margin expansion and operating leverage.
JOYY is actively returning capital to shareholders through dividends and buybacks (over $135 million YTD as of June 2025) and maintains a strong net cash position ($3.3 billion), which supports financial resilience, allows for continued investment in new growth engines and infrastructure, and could underpin share price appreciation via improved earnings and reduced share count.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of $56.875 for JOYY based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $70.0, and the most bearish reporting a price target of just $35.0.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $2.4 billion, earnings will come to $267.8 million, and it would be trading on a PE ratio of 11.6x, assuming you use a discount rate of 7.6%.
Given the current share price of $59.87, the analyst price target of $56.88 is 5.3% lower. The relatively low difference between the current share price and the analyst consensus price target indicates that they believe on average, the company is fairly priced.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

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Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

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