Kanzhun (NasdaqGS:BZ): Exploring Valuation Following Strong Q3 Results and Double-Digit Growth Guidance

Kanzhun (NasdaqGS:BZ) just released its third quarter results, reporting sharp increases in revenue and net income compared to a year ago. The company also issued guidance projecting double-digit revenue growth for the next quarter.

See our latest analysis for Kanzhun.

Kanzhun’s upbeat quarterly results come as its stock has been on a tear in 2024, with a year-to-date share price return of nearly 60%. When reinvested dividends are factored in, the one-year total shareholder return increases to about 80%, highlighting building momentum as the company delivers strong growth and guidance.

If Kanzhun’s momentum has you thinking about what other market leaders might be out there, consider broadening your search and discovering fast growing stocks with high insider ownership

Yet with shares already soaring nearly 60% year-to-date and analysts’ targets still projecting further upside, investors must now ask whether Kanzhun is trading at a bargain or if the market has already factored in its future growth.

Most Popular Narrative: 13.1% Undervalued

Kanzhun's narrative-based fair value estimate of $25.03 stands above the last closing price of $21.75, pointing to meaningful upside potential. This sets the stage for a closer look at the underlying catalysts driving such a premium.

Operating leverage through cost control, efficiency gains from AI integration across R&D and customer service, and a robust two-sided network effect are together driving margin expansion. These factors suggest continued improvement in net margins and profitability.

Read the complete narrative.

Curious what assumptions lift Kanzhun’s valuation? The boldest forecasts hinge on a rising profit multiple, future revenues large enough to rival sector leaders, and persistent margin expansion. See which single financial projection holds the key to the upside narrative and why some think the price could keep climbing.

Result: Fair Value of $25.03 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, a shrinking pool of new graduates and rising competition could limit Kanzhun’s market reach and threaten its robust profit margins over time.

Find out about the key risks to this Kanzhun narrative.

Another View: DCF Model Tells a Different Story

While market multiples suggest Kanzhun is a bit pricey compared to its peers, our DCF model paints a more optimistic picture. The SWS DCF model estimates fair value at $43.98, nearly double the current share price. This indicates significant potential undervaluation. Could the market be overlooking something critical?

Look into how the SWS DCF model arrives at its fair value.

Build Your Own Kanzhun Narrative

If you have a different perspective or want to dig into the numbers firsthand, you can easily craft your own Kanzhun narrative in just a few minutes, Do it your way

A good starting point is our analysis highlighting 3 key rewards investors are optimistic about regarding Kanzhun.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.

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