It’s been a good week for Bilibili Inc. (NASDAQ:BILI) shareholders, because the company has just released its latest quarterly results, and the shares gained 5.4% to US$32.70. Revenues of CN¥2.3b beat expectations by a respectable 5.9%, although statutory losses per share increased. Bilibili lost CN¥1.62, which was 69% more than what the analysts had included in their models. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
Taking into account the latest results, the current consensus from Bilibili’s 21 analysts is for revenues of CN¥11.0b in 2020, which would reflect a huge 42% increase on its sales over the past 12 months. Per-share losses are supposed to see a sharp uptick, reaching CN¥5.80. Before this earnings announcement, the analysts had been modelling revenues of CN¥10.4b and losses of CN¥5.23 per share in 2020. While this year’s revenue estimates increased, there was also a loss per share expectations, suggesting the consensus has a bit of a mixed view on the stock.
The average price target rose 24% to CN¥249, even thoughthe analysts have been updating their forecasts to show higher revenues and higher forecast losses. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Bilibili, with the most bullish analyst valuing it at CN¥43.04 and the most bearish at CN¥19.94 per share. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It’s pretty clear that there is an expectation that Bilibili’s revenue growth will slow down substantially, with revenues next year expected to grow 42%, compared to a historical growth rate of 66% over the past year. Juxtapose this against the other companies in the industry with analyst coverage, which are forecast to grow their revenues (in aggregate) 13% next year. Even after the forecast slowdown in growth, it seems obvious that Bilibili is also expected to grow faster than the wider industry.
The Bottom Line
The most important thing to take away is that the analysts increased their loss per share estimates for next year. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.
With that said, the long-term trajectory of the company’s earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Bilibili going out to 2024, and you can see them free on our platform here..
We don’t want to rain on the parade too much, but we did also find 3 warning signs for Bilibili that you need to be mindful of.
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This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Thank you for reading.