When Will Bilibili Inc. (NASDAQ:BILI) Breakeven?

With the business potentially at an important milestone, we thought we'd take a closer look at Bilibili Inc.'s (NASDAQ:BILI) future prospects. Bilibili Inc. provides online entertainment services for the young generations in the People’s Republic of China. On 31 December 2023, the US$6.5b market-cap company posted a loss of CN¥4.8b for its most recent financial year. Many investors are wondering about the rate at which Bilibili will turn a profit, with the big question being “when will the company breakeven?” Below we will provide a high-level summary of the industry analysts’ expectations for the company.

View our latest analysis for Bilibili

Consensus from 32 of the American Entertainment analysts is that Bilibili is on the verge of breakeven. They anticipate the company to incur a final loss in 2025, before generating positive profits of CN¥841m in 2026. Therefore, the company is expected to breakeven roughly 2 years from today. What rate will the company have to grow year-on-year in order to breakeven on this date? Using a line of best fit, we calculated an average annual growth rate of 73%, which signals high confidence from analysts. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

earnings-per-share-growth

Given this is a high-level overview, we won’t go into details of Bilibili's upcoming projects, however, keep in mind that generally a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

Before we wrap up, there’s one issue worth mentioning. Bilibili currently has a relatively high level of debt. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, which in Bilibili's case is 52%. A higher level of debt requires more stringent capital management which increases the risk in investing in the loss-making company.

Next Steps:

There are key fundamentals of Bilibili which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at Bilibili, take a look at Bilibili's company page on Simply Wall St. We've also put together a list of key aspects you should look at:

1. Valuation: What is Bilibili worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether Bilibili is currently mispriced by the market.

2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Bilibili’s board and the CEO’s background.

3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.