On Wednesday, Citi adjusted its outlook on Kanzhun Ltd. (NASDAQ: BZ), increasing the price target to $16.50 from the previous target of $16.00. Trading at $14.59, the stock appears slightly undervalued according to InvestingPro analysis. The firm retained a Buy rating on the stock, expressing confidence in the company's solid industry position and the progress of its share repurchase program.
Kanzhun's third-quarter 2024 results were reported to align with credit and revenue expectations, while the earnings outperformance was attributed to higher-than-anticipated other income. With a market capitalization of $6.1 billion and an impressive gross profit margin of 83%, the company maintains strong fundamentals. The forecast for fourth-quarter 2024 revenue is consistent with Citi's projections, albeit indicating a deceleration in growth due to the broader macroeconomic environment.
The management of Kanzhun has observed some positive shifts in enterprise demand since October, despite ongoing economic uncertainties. The company's revenue growth of 35.4% in the last twelve months and "GREAT" overall financial health score from InvestingPro support its growth trajectory.
Looking into 2025, the company aims to drive revenue growth by expanding its user base, enhancing the paying ratio, and increasing average revenue per user (ARPU). Additionally, there will be a concerted effort to improve cost management, particularly in terms of marketing efficiency, to further boost profit margins.
Citi has revised its earnings estimates for Kanzhun upwards for the years 2024, 2025, and 2026 by 3%, 1%, and 1%, respectively. This revision reflects the unexpected other income reported post-results. The price target adjustment to $16.50 is a direct outcome of these updated earnings projections.
The firm has emphasized the importance of any major government policies as potential catalysts for Kanzhun's share price in the future. The maintained Buy rating indicates Citi's optimism about Kanzhun's prospects and its ability to navigate through the challenges posed by the current economic climate.
In other recent news, ConGen Limited reported a strong financial performance for Q3 2024, with a significant growth in both revenue and net income. The company's revenue grew by 19% year-over-year to RMB 1.91 billion, while net income was reported at RMB 461 million. ConGen's strategic focus on blue-collar and small enterprise markets continues to yield positive results, with the blue-collar business contributing over 38% of total revenue.
Furthermore, the BOSS Jiping app, a part of ConGen's operations, saw a 30% increase in monthly active users. Looking ahead, ConGen projects Q4 revenue to grow by up to 14.5% year-over-year. These developments are a testament to ConGen's resilience and strategic focus amid a challenging market environment.
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