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Bilibili (BILI) to Report Q3 Earnings: What's in the Cards?

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Bilibili (BILI - Free Report) is set to report third-quarter 2020 results on Nov 18.

For third-quarter 2020, revenues are anticipated between RMB3.05 billion and RMB3.1 billion. The company had reported RMB 1.859 billion in the year-ago quarter.

The Zacks Consensus Estimate for revenues is pegged at $444.4 million, indicating 70.9% upside from the year-ago quarter’s reported figure.

The consensus mark for third-quarter loss has widened by a couple of cents to 37 cents over the past 30 days. The company had incurred a loss of 15 cents in the year-ago quarter.

Notably, the company’s earnings missed the Zacks Consensus Estimate in the trailing three quarters while beating in one, the average negative surprise being 17.7%.
 

Let’s see how things have shaped up for the upcoming announcement.

Factors to Consider

Bilibili’s third-quarter top line is expected to have benefited from its enhanced monetization efforts, led by increase in the number of paying users for the company’s premium membership program, live broadcasting services and other value-added services.

In the second quarter of 2020, average monthly paying users (MPUs) reached 12.9 million, up 105% year over year.

Additionally, strong popularity of both existing and newly launched mobile games is expected to have driven active user growth in the to-be-reported quarter.

In the second quarter, average monthly active users (MAUs) reached 171.6 million, and mobile MAUs reached 152.9 million, representing increases of 55% and 59%, respectively, from the year-ago quarter. Extended summer holidays in China due to the coronavirus outbreak are expected to have aided user-base growth, particularly mobile gamers, in the to-be-reported quarter.

Moreover, the company’s solid partner base and expanding strategic partnerships, comprising the likes of Alibaba (BABA - Free Report) and Tencent (TCEHY - Free Report) have been key catalysts.

However, increasing channel and marketing expenses associated with Bilibili’s app and brand, as well as promotional expenses for the company’s mobile games, are expected to have kept margins under pressure in the to-be-reported quarter.

Key Q3 Developments

During the to-be-reported quarter, Bilibili announced an equity investment in Huanxi Media.

Moreover, Bilibili announced its strategic partnership with Riot Games under which the latter granted a three-year exclusive license to the former for live broadcasting the League of Legend Esports global events (in Mandarin only), including the world-renowned League of Legend World Championship, Mid-Season Invitational, and All-Star Event in China beginning in 2020 through the 2023 Mid-Season Invitational.

What Our Model Says

According to the Zacks model, the combination of a positive Earnings ESP and Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.

Bilibili has an Earnings ESP of +1.37% and a Zacks Rank #3. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

A Key Pick

Here is another company, which, per our model, has the right combination of elements to post an earnings beat in its upcoming release.

Kulicke and Soffa (KLIC - Free Report) has an Earnings ESP of +3.73% and carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

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