Bilibili's Focus Shift On DAU, Cost Reduction Plan Wins Analyst Attention

Benchmark analyst Fawne Jiang maintained a Buy rating and $30 price target on Bilibili Inc BILI.
BILI reported largely in-line Q3 results.
She expects growth challenges to persist in the close quarters, as macro headwinds will continue to take a toll on BILI's ad growth.
Uncertainties on game license approval and game launch schedule could hamper its games' outlook.
The company has decided to shift its user and traffic focus to prioritizing DAU growth instead of MAU going forward.
The shift should help to enhance user engagement and consequently open up commercialization opportunities.
It could also give the company more wiggle room to optimize its S&M spending.
Furthermore, management offered a sweeping cost and expense reduction plan and expected cost optimization and expense deduction Y/Y in FY23.
As such, she moderately lowered the FY23 revenue growth projection, factoring in a gradual macro recovery, and raised earnings estimates based on better cost savings.
Goldman Sachs analyst Lincoln Kong maintained a Neutral and lowered the price target from $25.6 to $22.2.
Barclays analyst Jiong Shao maintained an Equal-Weight and raised the price target from $13 to $16.
Price Action: BILI shares traded higher by 7.50% at $16.55 on the last check Wednesday.
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