Is BILI going to the moon in 2024? Here's what you need to know.

                   April 6th, 2024, written by Nick McCarroll

Key points:

Analysis

Bilibili is the top video-sharing platform in China. They are valued at 11.20 as of late March 2024. Bilibili has steadily improved their quarterly gross profits since Q2 of 2022 at a rate of 20 percent per quarter. Their net losses have been decreasing since Q2 of 2022 at a rate of 10-15 percent per quarter. Their advertising revenues are up 27% YOY (year-over-year) from 2022. Therefore, we believe Bilibili will continue to increase their gross profits and reduce their net losses on an upward trend thus resulting in profitable quarters spanning the next few years.

Growth Potential

Bilibili has seen an increase in their daily active users of over 2.5x from 2019 to end of 2023. Their audience primarily consists of young adults with the average age being 24. 48% of their user-base has consistently shown interactivity with commercial content which accounts for their increase in advertising revenue. The content created and shared on Bilibili is within multiple diverse categories, such as gaming, entertainment, food, music, lifestyle, and much more. Given Bilibili's diversified content and young interactive audience, we believe they can keep their users engaged and grow their community long-term.

Valuation

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Bilibili has been undervalued since 2022, and we believe that this stock should be trading at $48-52 based on the overall history of Bili's price-to-sales ratio. Bili is slowly coming back from its major stock price drop that happened in June of 2021. Currently, the stock is creeping around at a price-to-sales ratio of 1.90 while it should be much higher, at around 6.19 as it had before its spike in 2021. It is only a matter of time before the price increases again, so it's a great time to buy.

Conclusions

We believe its a good time to buy BILI stock due to their positive outlook for their revenues, their high growth potential for their audience, and their undervalued stock price for the value that they give.