Bilibili (NasdaqGS:BILI): Valuation Insights Following Strong Q3 Profit Surge and Upbeat Analyst Upgrades

Bilibili (NasdaqGS:BILI) posted a strong third-quarter net profit, with earnings jumping more than twofold from a year earlier. This sparked renewed investor interest and sent shares higher ahead of market open.

See our latest analysis for Bilibili.

Bilibili’s momentum has been hard to miss lately, with its share price climbing 54% year-to-date and a 1-year total shareholder return of 43.45%. This rise has been driven in part by surging profits and positive sentiment around its ad business and new games. While the stock dipped about 10% in the past month, its substantial 16% gain over the last 90 days indicates that enthusiasm is still building, especially after the latest earnings surprise and recent strategic moves.

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With profits surging and analyst targets moving higher, some investors are asking if Bilibili remains attractively valued or if its recent rally means future growth is already reflected in the price. The question remains whether there is still a buying opportunity, or if the market is pricing in all the upside.

Most Popular Narrative: 11.9% Undervalued

Bilibili's fair value, according to the most widely referenced narrative, sits noticeably above its latest closing price. Analysts are banking on key drivers that could reshape the company's future trajectory.

The company's strengthening of its proprietary IP ecosystem through the success of in-house animation and gaming, particularly with long-life cycle titles like San Mou, is likely to support higher content-driven revenues and reduced content cost pressures. This could positively impact gross and operating margins.

Read the complete narrative.

Curious how ambitious content goals are just the start? The real story lies in the bold revenue and margin leaps forecasted by analysts. Want to uncover the pivotal assumptions that underpin this compelling fair value? Dive in to see which future financial shifts could make or break Bilibili's next chapter.

Result: Fair Value of $29.93 (UNDERVALUED)

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

However, shifts in youth demographics or delays in new game approvals could quickly challenge the optimism surrounding Bilibili’s growth outlook.

Find out about the key risks to this Bilibili narrative.

Another View: Market Multiples Challenge the Narrative

While fair value estimates suggest Bilibili appears undervalued, the market tells a different story. The company's price-to-earnings ratio sits at 100.7x, which is significantly higher than both its US industry average of 17.3x and the peer average of 20.8x. Even compared to its fair ratio of 33x, the current valuation looks expensive. For investors, this raises the question: is the excitement already baked in, or is there more room for upside?

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own Bilibili Narrative

If you see things differently or want to dig into the details yourself, you can craft your own take by exploring the numbers in just a few minutes. Do it your way

A great starting point for your Bilibili research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision.

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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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