U.S. markets close in 3 hours 27 minutes
  • S&P 500

    -20.21 (-0.53%)
  • Dow 30

    -114.88 (-0.37%)
  • Nasdaq

    -75.63 (-0.58%)
  • Russell 2000

    -33.14 (-1.54%)
  • Crude Oil

    -1.46 (-2.73%)
  • Gold

    -21.90 (-1.18%)
  • Silver

    -1.02 (-3.94%)

    -0.0059 (-0.48%)
  • 10-Yr Bond

    -0.0370 (-3.28%)

    -0.0093 (-0.68%)

    -0.0310 (-0.03%)

    -1,844.56 (-4.87%)
  • CMC Crypto 200

    -45.63 (-6.21%)
  • FTSE 100

    -66.25 (-0.97%)
  • Nikkei 225

    -179.08 (-0.62%)

Bilibili Inc.'s (NASDAQ:BILI) Shift From Loss To Profit

Simply Wall St
·3 min read

Bilibili Inc.'s (NASDAQ:BILI): Bilibili Inc. provides online entertainment services for the young generations in the People’s Republic of China. With the latest financial year loss of -CN¥616.3m and a trailing-twelve month of -CN¥1.1b, the US$7.9b market-cap amplifies its loss by moving further away from its breakeven target. As path to profitability is the topic on BILI’s investors mind, I’ve decided to gauge market sentiment. Below I will provide a high-level summary of the industry analysts’ expectations for BILI.

Check out our latest analysis for Bilibili

According to the 21 industry analysts covering BILI, the consensus is breakeven is near. They expect the company to post a final loss in 2021, before turning a profit of CN¥865m in 2022. So, BILI is predicted to breakeven approximately 2 years from today. How fast will BILI have to grow each year in order to reach the breakeven point by 2022? Working backwards from analyst estimates, it turns out that they expect the company to grow 47% year-on-year, on average, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.

NasdaqGS:BILI Past and Future Earnings, March 18th 2020
NasdaqGS:BILI Past and Future Earnings, March 18th 2020

I’m not going to go through company-specific developments for BILI given that this is a high-level summary, but, take into account that generally a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

One thing I would like to bring into light with BILI is its relatively high level of debt. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, which in BILI’s case is 42%. A higher level of debt requires more stringent capital management which increases the risk in investing in the loss-making company.

Next Steps:

This article is not intended to be a comprehensive analysis on BILI, so if you are interested in understanding the company at a deeper level, take a look at BILI’s company page on Simply Wall St. I’ve also compiled a list of key aspects you should look at:

  1. Valuation: What is BILI worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether BILI is currently mispriced by the market.

  2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Bilibili’s board and the CEO’s back ground.

  3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.