Is Bilibili a Buy Under $30?

: BILI | Bilibili Inc. News, Ratings, and Charts

BILI – Although the entertainment services company Bilibili (BILI) reported stable top-line growth in its last quarter, its widening losses and negative profit margins have raised investors’ concerns. So, would it be worth betting on the stock at its current price level, considering the SEC’s recent crackdown on U.S-listed Chinese companies? Read on. Let’s find out.

Bilibili Inc. (BILI) is a Shanghai, China-based online entertainment services company. Its platform provides content that includes video services, mobile games, value-added services, and ACG-related comic and audio content. Professionally created videos, occupationally made videos, and live streaming are among the video services the organization offers.

BILI’s shares are down 78.9% in price over the past year and 40.6% over the past month to close yesterday’s trading session at $21.68.

In addition, Goldman Sachs analyst Piyush Mubayi downgraded the stock to Neutral from Buy and lowered its price target to $43 from $105. The downgrade is based on the company’s monetization rate, profitability, and cash flow prospects, which have been impacted by worsening macroeconomic conditions in China and regulatory uncertainty in the online game/ad sectors.

Here is what could shape BILI’s performance in the near term:

U.S. Securities and Exchange Commission (SEC) Crackdown

The SEC recently named five Chinese companies that are publicly traded in the United States that have failed to comply with the Holding Foreign Companies Accountable Act (HFCAA). The American depositary receipts (ADRs) of these companies may be the first publicly traded Chinese securities to be penalized for failing to follow HFCAA requirements. This SEC investigation has resulted in a widespread selloff of Chinese stocks.

Negative bottom line

BILI’s total net revenue increased 51% year-over-year to RMB5.78 billion ($907.1 million) for the fourth quarter, ended Dec. 31, 2021. Its average daily active users (DAUs) grew 34% from its year-ago value to 252.4 million. However, its operating loss increased 50.5% from the prior-year quarter to RMB1.99 billion ($316.24 million). And the company’s net loss surged 148.4% from its year-ago value to RMB2.09 billion ($331.46 million), while its loss per share amounted to RMB2.34.

Poor Profitability

BILI’s 20.9% trailing-12-months gross profit margin is 59.5% lower than the 51.6% industry average. Also, its ROA, net income margin, and ROC are negative 13%, 35%, and 13.9%, respectively. And its trailing-12-month cash from operations of $115.37 million is 61.5% lower than the $299.40 million industry average.

POWR Ratings Reflect Uncertainty

BILI has an overall D rating, which equates to Sell in our proprietary POWR Ratings system. The POWR ratings are calculated by considering 118 distinct factors, with each factor weighted to an optimal degree.

Our proprietary rating system also evaluates each stock based on eight distinct categories. BILI has a D grade for Stability, Quality, and Growth. The stock has a 1.34 beta, which is in sync with its  Stability grade. In addition, the company’s weak profitability and financials are consistent with the Quality and Growth grade.

Among the 50 stocks in the F-rated China industry, BILI is ranked #48.

Beyond what I have stated above, you can view BILI ratings for Value, Sentiment, and Momentum here.

Bottom Line

Considering the SEC crackdown on U.S.-listed Chinese stocks and the heavy regulatory pressure on tech stocks in China, investors remain concerned about BILI’s prospects. In addition, the stock is currently trading below its 50-day and 200-day moving averages of $34.82 and $70.93, respectively, indicating bearish sentiment. So, given the company’s negative profit margins and widening losses, we believe the stock is best avoided now.

How Does Bilibili Inc. (BILI) Stack Up Against its Peers?

While BILI has an overall D rating, one might want to consider its industry peers, NetEase Inc. (NTES), FinVolution Group (FINV), and China Automotives Systems Inc. (CAAS) which has an overall B (Buy) rating.

Note that FINV is one of the few stocks handpicked by our Chief Growth Strategist, Jaimini Desai, currently in the POWR Stocks Under $10 portfolio. Learn more here.


BILI shares rose $0.72 (+3.32%) in premarket trading Friday. Year-to-date, BILI has declined -53.28%, versus a -10.42% rise in the benchmark S&P 500 index during the same period.


About the Author: Pragya Pandey


Pragya is an equity research analyst and financial journalist with a passion for investing. In college she majored in finance and is currently pursuing the CFA program and is a Level II candidate. More...


More Resources for the Stocks in this Article

TickerPOWR RatingIndustry RankRank in Industry
BILIGet RatingGet RatingGet Rating
NTESGet RatingGet RatingGet Rating
FINVGet RatingGet RatingGet Rating
CAASGet RatingGet RatingGet Rating

Most Popular Stories on StockNews.com


:  |  News, Ratings, and Charts

Recession or Not Recession…That Is the Question

Every investor appreciates that recessions and bear markets go hand in hand. But the definition of a recession often seems more difficult to pin down. So are we in a recession? And if not, then does that mean that disaster has been averted or that the pain train is still rolling towards investors? This is an important debate because it helps us appreciate what lies ahead for the stock market (SPY). We will tackle this vital topic in this week's commentary. Read on below...

:  |  News, Ratings, and Charts

3 Cybersecurity Stocks to Buy on the Pullback

Tech stocks are rallying. Within the sector, cybersecurity stocks offer the best combination of growth and value especially as the sector's importance grows everyday. Read on to find out why investors should consider buying top cybersecurity stocks like Fortinet (FTNT), Qualys (QLYS), and OneSpan (OSPN).

:  |  News, Ratings, and Charts

4 Big Reasons Why the Bear Rally Is Nearing an End…

The Stock Market (SPY) has put on an impressive rally over the last few weeks, leading many investors to believe that the bull is ready to resume its run. However, there are multiple reasons to believe the bear market is far from over. I lay out 4 of the main reasons below and explain how you can profit from the volatile markets that lie ahead. Read on below for more…

:  |  News, Ratings, and Charts

Is Costco Stock Still a Buy Amid Retail Troubles?

Retail companies have faced significant headwinds this year due to sky-high inflation and supply chain disruptions. However, Costco Wholesale's (COST) strong revenue performance and consistent margins have helped the stock to remain resilient amid retail troubles. So is this stock worth adding to your portfolio now? Let’s find out…

:  |  News, Ratings, and Charts

4 Big Reasons Why the Bear Rally Is Nearing an End…

The Stock Market (SPY) has put on an impressive rally over the last few weeks, leading many investors to believe that the bull is ready to resume its run. However, there are multiple reasons to believe the bear market is far from over. I lay out 4 of the main reasons below and explain how you can profit from the volatile markets that lie ahead. Read on below for more…

Read More Stories

More Bilibili Inc. (BILI) News View All

Event/Date Symbol News Detail Start Price End Price Change POWR Rating
Loading, please wait...
View All BILI News