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JPMorgan changed its stance on Monday Bilibili Inc . (NASDAQ:), upgrading the stock from Underweight to Neutral and adjusting the price target to $11 from the previous $10. The revision reflects a reassessment of the company’s risk/reward ratio, as the analyst believes that market expectations are now more aligned with the company’s revenue growth targets for the year.
The update comes after Bilibili management set a double-digit revenue growth target for 2024, which is consistent with consensus forecasts of a 14% year-over-year increase. This alignment suggests there may be limited need for forecast adjustments in the near term. Bilibili’s performance in new game pipelines and live streaming will be key to achieving this growth, especially as they face increased competition in the game streaming market.
Bilibili is expected to begin a new cycle of game launches starting in the second quarter of 2024, with major titles such as “Three Kingdom” and “Heaven Burns Red”. These releases are expected to help reaccelerate gaming revenue. The company also saw an improvement in its financial position, having reported positive operating cash flow in the third and fourth quarters of 2023.
Additionally, Bilibili has set a goal of reaching breakeven in non-GAAP operating earnings by the third quarter of 2024. These factors contribute to the analyst’s view that downside in Bilibili’s stock price will be limited over the next three to six months . Additionally, if new games perform better than expected, the stock could potentially outperform.
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