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On Wednesday, HSBC analyst Charlene Liu upgraded Bilibili (NASDAQ:BILI) stock from Hold to Buy, setting a new price target of $22.50, up from the previous $21.50. The upgrade follows Bilibili’s Sanmou Season 7 (S7) performance, which surpassed both HSBC’s and Street’s expectations. According to InvestingPro data, analysts maintain a strong buy consensus with price targets ranging from $18.03 to $36.22, suggesting significant upside potential. Liu expressed optimism about the upcoming Season 8, anticipated to launch at the end of May, which is expected to introduce significant updates as the game marks its first anniversary.
The analyst has increased the game’s revenue projections for the years 2025 to 2027 by 6-8%, and the overall top line by 2%, after accounting for better-than-expected value-added services (VAS) driven by quality user growth. This aligns with Bilibili’s strong track record, as InvestingPro data shows impressive revenue growth of 21.83% in the last twelve months and a healthy gross profit margin of 34.46%. Advertisement revenues met predictions, with continued expectations of 18% growth in 2025. The first quarter of 2025 showed a better-than-expected margin, reinforcing confidence in further margin improvements as Bilibili enhances operating efficiency through AI and strengthens user synergies between its platform and the Sanmou game.
As a result of these factors, HSBC has raised its adjusted net profit forecasts for Bilibili by 3-15% from 2025 to 2027. The new price target of $22.50 implies an approximate 25% upside from the current level, which closely aligns with InvestingPro’s Fair Value assessment indicating the stock is currently undervalued. Liu cited the company’s resilient performance in its high-margin game and advertisement businesses as potential drivers for stronger earnings prospects. With a 2025 estimated PE of 22x against a 48% year-over-year growth in 2026 non-GAAP EPS, HSBC views Bilibili’s valuation as reasonable. InvestingPro’s Financial Health Score of 2.76 (rated as "GOOD") further supports the positive outlook.
In other recent news, Bilibili has garnered attention following its robust financial performance. The company reported a significant increase in revenue and margin improvements, which have led analysts to adjust their outlook. Mizuho (NYSE:MFG) Securities raised Bilibili’s stock target to $26, citing a consistent annual margin expansion of approximately 15 percentage points over the past two years. Similarly, Benchmark increased its price target to $30, driven by Bilibili’s strong fourth-quarter earnings and the successful performance of its flagship game, San Mou. Both firms maintain positive ratings on the stock, with Mizuho emphasizing the company’s strong ecosystem and engaged user base as factors for future growth. Benchmark highlighted Bilibili’s strategic focus on advertising and content creation, which is expected to further bolster revenue. Analysts project continued margin improvements and revenue growth into the mid-teens percentage range. These developments reflect growing confidence in Bilibili’s operational efficiency and long-term prospects.
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