UBS has updated its financial outlook on Kanzhun Ltd. (NASDAQ: BZ), raising the price target to $23.50 from $22.00, with a Neutral rating on the stock. The revision is based on the company’s continued user growth and enhanced enterprise engagement in the first quarter, with expectations for ongoing momentum in the second quarter.
Kanzhun, famous for Boss Zhipin platform, has seen a significant increase in daily active users, with both bosses and enterprises reaching record levels. The blue-collar sector, especially manufacturing and logistics, has been leading the recovery in various industries since the start of the year.
UBS predicts a 3.3% quarter-over-quarter growth in Kanzhun’s cash billings for the second quarter, adjusting for seasonal trends. However, they anticipate a higher year-over-year growth in the following quarters. UBS maintains a projection of a 31.0% year-over-year increase in cash billings for the full year, supporting a 30.6% revenue growth in 2024.
The firm also anticipates operational efficiency improvements for Kanzhun due to organic traffic growth and effective marketing spend. Adjusted operating margin (OPM) estimates are set at 33.4% in the second quarter and 33.1% for the full year 2024.
InvestingPro Insights
InvestingPro data supports UBS’s positive outlook on Kanzhun Ltd., with strong financial metrics indicating the company’s solid performance. The market capitalization is $9.76 billion, reflecting investor confidence in the firm’s value and growth potential. Kanzhun has seen a substantial 37.14% year-over-year revenue growth in the last twelve months as of Q1 2024, showcasing successful expansion and market penetration.
The platform’s efficiency is highlighted by a gross profit margin of 82.63%, demonstrating effective cost management while scaling operations. An EBITDA growth of 2266.14% indicates increasing profitability and operational excellence. The stock’s recent performance shows a 1-month price total return of 20.24% and a 3-month price total return of 46.24%, indicating strong market momentum.
InvestingPro Tips suggest examining the company’s PEG ratio, which at 0.07 suggests potential undervaluation relative to earnings growth. With the stock trading at 96.91% of its 52-week high and a fair value estimated at $27.98, there may be room for price appreciation. For readers interested in delving deeper into Kanzhun’s financials and gaining more insights, InvestingPro offers 15+ InvestingPro Tips that could aid investment decisions. To access these insights, use coupon code PRONEWS24 for an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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