Kanzhun Limited Just Beat Earnings Expectations: Here's What Analysts Think Will Happen Next

A week ago, Kanzhun Limited (NASDAQ:BZ) came out with a strong set of first-quarter numbers that could potentially lead to a re-rate of the stock. The company beat forecasts, with revenue of CN¥1.7b, some 2.2% above estimates, and statutory earnings per share (EPS) coming in at CN¥0.54, 77% ahead of expectations. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

Check out our latest analysis for Kanzhun

Taking into account the latest results, the consensus forecast from Kanzhun's 20 analysts is for revenues of CN¥7.76b in 2024. This reflects a huge 22% improvement in revenue compared to the last 12 months. Per-share earnings are expected to expand 18% to CN¥3.49. Before this earnings report, the analysts had been forecasting revenues of CN¥7.70b and earnings per share (EPS) of CN¥3.31 in 2024. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.

The analysts have been lifting their price targets on the back of the earnings upgrade, with the consensus price target rising 7.0% to US$25.85. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on Kanzhun, with the most bullish analyst valuing it at US$34.70 and the most bearish at US$19.98 per share. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's clear from the latest estimates that Kanzhun's rate of growth is expected to accelerate meaningfully, with the forecast 30% annualised revenue growth to the end of 2024 noticeably faster than its historical growth of 22% p.a. over the past three years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 10% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Kanzhun is expected to grow much faster than its industry.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Kanzhun following these results. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Kanzhun going out to 2026, and you can see them free on our platform here.

However, before you get too enthused, we've discovered 1 warning sign for Kanzhun that you should be aware of.

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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.