Yahoo Finance Is Bilibili's (NASDAQ:BILI) 221% Share Price Increase Well Justified?
Unfortunately, investing is risky - companies can and do go bankrupt. But when you pick a company that is really flourishing, you can make more than 100%. For example, the Bilibili Inc. (NASDAQ:BILI) share price has soared 221% in the last year. Most would be very happy with that, especially in just one year! Also pleasing for shareholders was the 39% gain in the last three months. But this could be related to the strong market, which is up 16% in the last three months. Bilibili hasn't been listed for long, so it's still not clear if it is a long term winner.
View our latest analysis for Bilibili
Bilibili isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.
In the last year Bilibili saw its revenue grow by 71%. That's a head and shoulders above most loss-making companies. And the share price has responded, gaining 221% as we previously mentioned. That sort of revenue growth is bound to attract attention, even if the company doesn't turn a profit. Given the positive sentiment around the stock we're cautious, but there's no doubt its worth watching.
The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).
Bilibili is a well known stock, with plenty of analyst coverage, suggesting some visibility into future growth. You can see what analysts are predicting for Bilibili in this interactive graph of future profit estimates.
A Different Perspective
Bilibili shareholders should be happy with the total gain of 221% over the last twelve months. That's better than the more recent three month gain of 39%, implying that share price has plateaued recently. Having said that, we doubt shareholders would be concerned. It seems the market is simply waiting on more information, because if the business delivers so will the share price (eventually). While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Case in point: We've spotted 3 warning signs for Bilibili you should be aware of.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will grow earnings.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.
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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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