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Monday, Mizuho (NYSE:MFG) Securities maintained their Outperform rating on Bilibili (NASDAQ:BILI) shares and increased the price target to $26.00, up from the previous $22.00. The stock, currently trading at $22.82, has demonstrated remarkable momentum with a 127.74% return over the past year. According to InvestingPro data, the company’s market capitalization stands at $9.49 billion. The adjustment reflects the analyst’s positive outlook on the company’s financial performance and future prospects.
Bilibili’s recent financial results showcased a robust revenue increase of 19.1% year-over-year and a significant margin improvement, which caught the attention of Mizuho analysts. The company has demonstrated consistent annual margin expansion of approximately 15 percentage points for two consecutive years. While InvestingPro data shows the company isn’t currently profitable, analysts predict profitability this year. This trend has bolstered the confidence of analysts in Bilibili’s operational efficiency and profitability.
Looking forward, Mizuho anticipates that Bilibili’s strong ecosystem, coupled with a steady supply of premium content and an actively engaged user base, will drive the company’s revenue growth into the mid-teens percentage range. Additionally, they project a further 7 percentage point improvement in margins for the fiscal year 2025.
In light of these expectations, Mizuho has revised their fiscal year 2026 EBITDA estimates upwards by 8%, taking into account the company’s improved margin outlook. The new price target of $26 is based on a 12-times multiple of the revised fiscal year 2026 EBITDA estimate, which is an increase from the previous 10-times multiple. This valuation adjustment aligns with historical EBITDA multiples for Bilibili, which have ranged from 7 to 20 times.
The analyst’s commentary highlighted the company’s strong performance and positive trajectory, stating, "We are impressed by the annual margin expansion of 15pts 2 years in a row. Looking ahead, we believe the strong ecosystem, premium content supply, and engaging users will enable the company to deliver mid-teens revenue growth and another 7pts margin improvement YoY in FY25." The revised EBITDA forecast and subsequent price target increase reflect Mizuho’s belief in Bilibili’s continued financial success. InvestingPro analysis reveals the stock is currently trading near its Fair Value, with 12 additional exclusive insights available to subscribers, including detailed valuation metrics and growth indicators.
In other recent news, Bilibili has seen a series of analyst updates following its financial performance and strategic developments. Benchmark analyst Fawne Jiang increased the price target for Bilibili shares to $30, citing strong fourth-quarter earnings driven by the success of its flagship game San Mou and unexpected advertising revenue growth. Benchmark maintains a Buy rating, highlighting the potential for Bilibili’s advertising ecosystem, which is currently underutilized. Meanwhile, Mizuho Securities raised its price target to $26, emphasizing Bilibili’s significant revenue increase and margin expansion, along with a positive outlook on future margin improvements and revenue growth.
Conversely, Citi analysts reduced their price target to $20.50, maintaining a Neutral rating due to mixed gaming and advertising momentum. Citi forecasts stable gaming revenue but anticipates a slight deceleration in advertising growth. Bernstein SocGen Group also retained a Market Perform rating with a price target of $18, pointing to the challenges Bilibili faces in surpassing peak gaming revenues and ad growth falling short of expectations. Despite the varied ratings, Bilibili’s strategic focus on enhancing advertising and content creation continues to be a point of interest for investors.
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