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On Friday, Mizuho (NYSE:MFG) Securities displayed confidence in Bilibili Inc . (NASDAQ:BILI), increasing the price target to $26 from the previous $22, while reiterating an Outperform rating on the shares. Currently trading at $22.11, the stock has demonstrated remarkable momentum with a 114.45% return over the past year. The adjustment follows Bilibili’s recent financial performance, which showcased both a significant revenue increase and an impressive margin expansion. According to InvestingPro, the company holds more cash than debt on its balance sheet, suggesting financial stability.
Analysts at Mizuho highlighted the company’s consecutive annual margin growth, approximately 15 percentage points for two years straight, as a noteworthy achievement. While the company currently maintains a gross profit margin of 32.7%, they anticipate this trend to continue, projecting a further 7 percentage point improvement in margins year-over-year for fiscal year 2025.
The positive outlook is supported by Bilibili’s robust ecosystem, a continuous supply of premium content, and a highly engaged user base. These factors are expected to drive mid-teen percentage revenue growth for the company, with InvestingPro forecasting 19% revenue growth for FY2025. Based on these projections, Mizuho has also raised its FY26 EBITDA estimates by 8%, reflecting a more optimistic margin forecast.
The revised price target of $26 is based on an increased 12 times multiple of the firm’s updated FY26E EBITDA, up from the prior 10 times multiple. This valuation adjustment aligns with the historical EBITDA multiple range for Bilibili, which spans from 7 to 20 times. Mizuho’s analysis suggests a strong financial future for Bilibili, backed by solid user engagement and content strategies. For deeper insights into Bilibili’s valuation metrics and over 30 key financial indicators, check out the comprehensive Pro Research Report available exclusively on InvestingPro.
In other recent news, Bilibili is preparing for its upcoming fourth-quarter 2024 earnings report, with Citi analysts maintaining a Neutral rating while adjusting the price target to $20.50 from $22.00. Citi forecasts that Bilibili’s revenue and adjusted earnings will align with Bloomberg’s consensus for the quarter. The company’s gaming revenue is expected to remain stable, although advertising growth might see a slight deceleration due to tougher year-over-year comparisons. Despite this, advertising is anticipated to remain a primary growth driver. Meanwhile, Bernstein has retained its Market Perform rating on Bilibili, with a price target of $18.00, citing the company’s unexpected performance, largely due to its Three Kingdoms strategy game. However, Bernstein notes that peak billings for the game are now behind, and fourth-quarter ad growth fell short of expectations. Both firms highlight that Bilibili’s stock is trading at significant multiples of its projected 2025 and 2026 earnings, which may present challenges for investors. As the company navigates these developments, analysts have opted to maintain a neutral stance on Bilibili’s stock.
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