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Why Bilibili Stock Popped 11% Today

By Rich Smith - Feb 10, 2021 at 5:07PM

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Earnings are on the horizon.

What happened

Shares of Bilibili (BILI 3.10%), the Chinese youth-focused online entertainment company, were off to the races on Wednesday, closing 11.6% higher on no obvious news, though there does appear to be a catalyst to the rally.

So what

On Wednesday, Feb. 24, Bilibili is due to report its fourth-quarter and full-year 2020 earnings. Analysts who follow the stock are forecasting that Bilibili will report a $0.33 per share loss for the quarter and a $1.18 per share loss for the year.  

Stock up glowing green arrow climbs on a stock screen

Image source: Getty Images.

Now what

Those aren't particularly exciting numbers, of course. On the other hand, they seem to set a very low bar for the company. Should Bilibili report a surprise profit -- or even a loss not quite so abysmal as the one Wall Street has told us to expect, Bilibili shares could enjoy a relief rally.

For that matter, investors who have been told there's zero chance of Bilibili earning any profits may not pay any attention to the size of the company's loss, and focus instead on sales growth -- and in that regard, the news could be quite a bit better. Analysts have Bilibili pegged to close out this year with 90% sales growth over 2020 levels. They also believe that sales growth accelerated in Q4, and think sales growth as high as 93% wouldn't be out of the question.

If Bilibili can deliver those kinds of numbers, it may not matter to investors whether the company is profitable yet, or not.

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