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Bilibili (BILI) Moves 8.1% Higher: Will This Strength Last?

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Bilibili (BILI - Free Report) shares ended the last trading session 8.1% higher at $9.93. The jump came on an impressive volume with a higher-than-average number of shares changing hands in the session. This compares to the stock's 42.9% loss over the past four weeks.

The recent surge in Bilibili’s shares reflects solid prospects as it is expected to gain market share in the second half of 2022 in the advertisement industry with its popular products, such as ads in Story Mode. This will positively impact the top-line growth of the company in the third quarter of 2022. Also, cost control initiatives such as cutting sales and marketing expenses is expected to help in operating margin expansion.

This Chinese video sharing website is expected to post quarterly loss of $0.70 per share in its upcoming report, which represents a year-over-year change of -9.4%. Revenues are expected to be $865.39 million, up 7.6% from the year-ago quarter.

While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

For Bilibili, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on BILI going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Bilibili belongs to the Zacks Internet - Services industry. Another stock from the same industry, Dropbox (DBX - Free Report) , closed the last trading session 2.3% higher at $22.12. Over the past month, DBX has returned 8.2%.

Dropbox's consensus EPS estimate for the upcoming report has remained unchanged over the past month at $0.37. Compared to the company's year-ago EPS, this represents no change. Dropbox currently boasts a Zacks Rank of #3 (Hold).


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