Should You Investigate Bilibili Inc. (NASDAQ:BILI) At US$14.73?

While Bilibili Inc. (NASDAQ:BILI) might not have the largest market cap around , it saw a significant share price rise of 41% in the past couple of months on the NASDAQGS. While good news for shareholders, the company has traded much higher in the past year. With many analysts covering the mid-cap stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. However, what if the stock is still a bargain? Let’s examine Bilibili’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.

Check out our latest analysis for Bilibili

What's The Opportunity In Bilibili?

According to our valuation model, Bilibili seems to be fairly priced at around 3.2% below our intrinsic value, which means if you buy Bilibili today, you’d be paying a reasonable price for it. And if you believe that the stock is really worth $15.21, then there isn’t much room for the share price grow beyond what it’s currently trading. What's more, Bilibili’s share price may be more stable over time (relative to the market), as indicated by its low beta.

What kind of growth will Bilibili generate?

Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. With profit expected to grow by 73% over the next year, the near-term future seems bright for Bilibili. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.

What This Means For You

Are you a shareholder? It seems like the market has already priced in BILI’s positive outlook, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at the stock? Will you have enough conviction to buy should the price fluctuates below the true value?

Are you a potential investor? If you’ve been keeping an eye on BILI, now may not be the most optimal time to buy, given it is trading around its fair value. However, the optimistic prospect is encouraging for the company, which means it’s worth further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

With this in mind, we wouldn't consider investing in a stock unless we had a thorough understanding of the risks. In terms of investment risks, we've identified 1 warning sign with Bilibili, and understanding it should be part of your investment process.

If you are no longer interested in Bilibili, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

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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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com