As a result of Citi upgrading the stock to Buy, the Bilibili (NASDAQ:BILI) share price has increased by 4.7%, marking a good gain for the second day in a row and putting the company on track to win three consecutive sessions. As a result, Bilibili stock surged.
On Thursday, investors responded favorably to a mixed earnings report, which caused shares of Bilibili to surge 9.7%. Several analysts classified the light 2023 projections as cautious.
Now Citi is participating in the responses, as an analyst named Brian Gong raised the Bilibili stock to Buy based on the catalysts yet to come.
Losses are continuously decreasing, and recent offers provide the impression that balance sheet issues have been “essentially eased,” as he put it.
He continued, saying, “Bili is still dedicated to achieving earnings breakeven by 2024.” Optimizing the revenue-sharing ratio and bandwidth cost will continue. Bili will become more selective about the content investments it makes.
Its 2023 forecast suggests that management expects gaming, advertising, and value-added services to surpass a 20% year-over-year increase; nevertheless, management anticipates e-commerce and other revenues to decrease by 25-30% due to reducing low-margin operations.
And while Citi is estimating flat sales for the first quarter, it is anticipating growth, to begin with, in the second quarter and continue on, given the introduction of new games and the re-acceleration of value-added services (VAS).
Gong is “tweaking” some cautious sales expectations for 2023 and 2024. Still, he is increasing his margin estimates to account for the revised advice.
With a price target of $28 on Bilibili stock, he anticipates a 24% gain.