On Tuesday, Jefferies updated its outlook on Kanzhun Ltd. (NASDAQ:BZ), increasing the price target to $26.20 from the previous figure of $23.30. The firm reaffirmed its Buy rating on the stock. This adjustment follows Kanzhun's release of its first-quarter financial results, which showed total revenue exceeding both consensus and Jefferies' own estimates by 1.9% and 3%, respectively. Additionally, the company's non-GAAP earnings surpassed expectations.
The company's management provided insights during the earnings release, noting that the growth of blue-collar segments remains robust and that large enterprise recovery is outpacing that of small and medium-sized enterprises (SMEs). Despite the low penetration of the number of paying users, Jefferies views this as a crucial driver for future growth, as opposed to average revenue per user (ARPU).
Looking ahead, Kanzhun's guidance for second-quarter revenue aligns with current consensus expectations. Jefferies anticipates a narrative of margin expansion to unfold in the second quarter and continue into the year 2024. This outlook is based on the company's recent performance and management's strategic commentary.
The investment firm's stance on Kanzhun remains positive, with expectations of sustained growth and improved profitability. The raised price target reflects Jefferies' confidence in the company's ability to capitalize on its market position and to enhance shareholder value over the coming months.
InvestingPro Insights
As Kanzhun Ltd. (NASDAQ:BZ) continues to showcase its market potential, real-time data from InvestingPro paints a comprehensive picture of the company's financial health. With a robust Market Cap of $10.05B and a significant Revenue Growth of 31.94% in the last twelve months as of Q4 2023, Kanzhun's financial trajectory aligns with Jefferies' optimistic view. The company's Gross Profit Margin stands at an impressive 82.19%, highlighting its ability to maintain profitability amidst growth. Moreover, the PEG Ratio of 0.07 suggests that the stock may be undervalued given its earnings growth potential.
InvestingPro Tips indicate that Kanzhun's Price / Book ratio is 5.22, which, combined with a high Price % of 52 Week High at 96.47%, could signal that the stock is trading near its intrinsic value. Furthermore, with an EBITDA Growth of 7852.68% in the last twelve months as of Q4 2023, the company's operational efficiency is evidently on the rise. For those looking to delve deeper, InvestingPro offers additional insights, with more tips available to help investors make informed decisions. Use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription and unlock the full potential of InvestingPro's expert analysis.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.