by Ian Harvey
October 15, 2020
Gaming platform Bilibili Inc (NASDAQ: BILI), another rapidly growing streaming play in China, has already notched a gain of 124% year-to-date, and some analysts believe that this growth story is anything but over.
Stock Options Made Easy “Armchair Trader Series Members” have already made 100% on this trade, which was executed on Monday last week, October 05, 2020.
Should we be re-entering with another options trade due to this pull-back?
The video game industry is involved in the development, marketing, and sale of video game hardware and software. The video game industry has performed well during the COVID-19 pandemic as business shutdowns and social-distancing measures have limited peoples' entertainment options. Because video games can be used in the home, they have become a popular option for many consumers.
Many U.S.-based traders probably aren't aware of Bilibili and might consider BILI stock a very niche investment. However, more traders are becoming aware of the potential that Bilibili offers in regard to profiting from the share growth being experienced.
A great example of this potential can be seen with the trade executed last week – the option trade bought Monday and close to doubling next day; eventually hitting the 100% mark 5 days later.
Let’s Have A Look At The Recommendation…..
……that was executed by “Armchair Trader Series Members” on Monday, October 05, 2020.
** OPTION TRADE: Buy BILI JAN 15 2021 45.000 CALLS at approximately $3.90 (Up to $4.20).
Place a pre-determined sell at $7.80.
Also include a protective stop loss of $1.60.
“Gaming platformBilibili Inc (NASDAQ: BILI), another rapidly growing streaming play in China, has already notched a gain of 124% year-to-date, and some analysts believe that this growth story is anything but over.
Bilibili recently announced that it has entered into a three-year strategic partnership with Riot Games, developer of the leading multiplayer online battle arena (MOBA) game League of Legends. The partnership gives Bilibili the rights to live broadcast the League of Legend Esports global events.
Bilibili Inc is a Chinese video sharing website based in Shanghai and centered around animation, comic and games (ACG).
It offers a platform that covers a range of genres and media formats, including videos, live broadcasting, and mobile games.
Bilibili Inc has a strategic collaboration agreement with Tencent Holdings Limited for sharing and operating existing and additional anime and games on its platform in China.
The Last Earnings Report.....
Bilibili last issued its quarterly earnings data on Wednesday, August 26th.
The company reported ($0.23) EPS for the quarter, beating the consensus estimate of ($0.25) by $0.02. Bilibili had a negative return on equity of 22.84% and a negative net margin of 21.49%. The firm had revenue of $370.50 million during the quarter, compared to analyst estimates of $360.03 million.
As a group, research analysts forecast that Bilibili will post -1.29 EPS for the current year.
J.P. Morgan analyst Alex Yao, tells clients he is “incrementally positive on BILI's growth outlook.”
Yao noted, “Management’s comment of peak MAU reaching 200 million milestone in August 2020 makes us more positive on BILI's long-term user growth beyond Gen-Z. We expect further user growth into Q4 2020 supported by League of Legend (LoL) World Championship Season 10 (in Sep/Oct 2020, BILI is one of the key broadcasting platforms).” To this end, the analyst estimates that MAU will surpass 400 million by 2023.
On top of this, BILI saw strong advertising revenue growth in the second quarter, with it up 108% year-over-year. According to Yao, this result “demonstrates its strong attraction to advertisers driven by its rich content and growing user base,” with the analyst expecting its solid execution in both user expansion and revenue diversification to increase its long-term addressable market.
Going forward, the company will most likely continue investing in branding and channel marketing to support user growth during strong seasonality. Expounding on the implications of this, Yao stated, “While such investment could expand near-term financial losses, we believe it could help BILI to accelerate user expansion and support monetization growth in the long run, as all of BILI's revenue drivers (game, ads, subscription etc.) are directly linked to user growth.”
As a result, the analyst sees further user growth as a major potential catalyst. The launch of new mobile games as well as the acceleration of content provider advertising platform Huahuo, which helps content providers connect with brand advertisers, could also drive significant upside, in Yao’s opinion.
Along with an Overweight rating, Yao keeps a $55 price target on the stock.
Also, expect more analysts start to adjust their price targets upwards based on the current situation, where two equities research analysts have rated the stock with a hold rating and six have issued a buy rating to the company’s stock. Bilibili has a consensus rating of Buy and an average price target of $53.43.
Bilibili has a 12 month low of $13.23 and a 12 month high of $54.00. The stock has a fifty day moving average price of $44.47 and a 200-day moving average price of $36.71. The company has a current ratio of 3.28, a quick ratio of 3.28 and a debt-to-equity ratio of 0.95. The firm has a market cap of $13.26 billion, a PE ratio of -50.82 and a beta of 1.06.”
...... OR read about it here.
Wednesday saw the share price drop, along with most of the market; and also pull-back again yesterday – another great buying opportunity!
Where Is Bilibili Share Price Headed Now?
Will Bilibili Share Price Start to Rise Again?
Will We Recommend Another Bilibili Trade?
What Other Trades Are We Anticipating?
Do You Wish To Be Part Of This Action?
Join us here at Stock Options Made Easy, and find out our trades moving forward.
An Important Note: That any suggestions for options trade considerations require investors/traders to use their own discretion as to when to enter or exit! As well, it is advisable to do further research and due diligence before executing your trade.
It is sometimes best to exit a trade, if there is already sufficient profit accrued, before an earnings report is presented. GREED can be the undoing of a nice profit!