Investing

Earnings Previews: Bilibili, Pinduoduo

The three major U.S. equity indexes closed higher on Wednesday. The Dow ended the day up 0.28%, the S&P 500 closed 0.59% higher, and the Nasdaq Composite closed up 0.99%. Ten of 11 sectors closed higher, with consumer cyclicals (up 1.33%) and communication services (up 1.22%) posting the biggest gains. Energy stocks (down 1.16%) were the day’s only losers.

The Fed Open Market Committee (FOMC) minutes were published Wednesday afternoon, revealing that a “substantial majority of [members] judged that a slowing in the pace of increase would likely soon be appropriate.” That gave equities a positive jolt to end the day. Just a reminder that U.S. markets close at 1:00 p.m. ET today.

The three major indexes opened mixed flat Friday’s premarket morning.

There are no earnings reports due out Friday, and only two notable earnings reports are scheduled for early next week.

Bilibili

Bilibili Inc. (NASDAQ: BILI) offers gaming, video, and live broadcasting platforms for children and teens in the People’s Republic of China. Over the past year, Bilibili shares have dropped by more than 80%. Shares reached their 52-week low in late October, and the year-old 52-week high rolled off Thursday. Bilibili has failed to stop a serious decline in its gaming operations. In 2018, the company received about 80% of its revenue from gaming. That percentage has plunged to around 21%. The problem was severe enough that the company’s CEO has taken direct control of Bilibili’s gaming operations and shunted its former leader to the sidelines. Bilibili reports quarterly results before markets open Tuesday morning.

Of 36 brokerages covering the company, 26 have given the stock a Buy or Strong Buy rating, with another 9 putting a Hold rating on the shares. At a current price of around $13.40 per share, the upside potential based on a median price target of $25.14 is 87.6%. At the high target of $121.49, the implied upside is a whopping 807%.

The consensus estimates call for third fiscal quarter revenue of $790.1 million, up 7.8% sequentially and down 2.1% year over year. Analysts have forecast an adjusted loss per share of $0.65, better than the prior quarter’s loss of $0.74 per share and flat year over year. For the full 2022 fiscal year ending in December, analysts are expecting Bilibili to post a per-share loss of $2.51 compared to a loss last year of $2.27 on sales of $3.1 billion, up 1.7%.

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