Bilibili has had a bumpy ride over the years, so if you are wondering whether the current share price reflects its underlying value, you are not alone.

Recently, the stock closed at US$21.46, with returns of a 3.2% decline over 7 days, a 4.9% decline over 30 days, an 18.6% decline year to date, a 22.2% gain over the past year and a 7.9% gain over three years, while the five year return sits at a 79.4% decline.

This mix of short term weakness and longer term recovery has kept Bilibili in the headlines, as investors reassess what they are willing to pay for the business and what risks they are comfortable holding. That context is important before weighing up whether the current price is attractive or not.

On Simply Wall St's 6 point valuation checklist, Bilibili currently scores a 3. This means it screens as undervalued on half of the checks used. The next sections look at how different valuation approaches view Bilibili today, and then finish with a way to go beyond the numbers to understand whether that valuation really fits the story. Curious how numbers become stories that shape markets? Explore Community Narratives

Approach 1: Bilibili Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow, or DCF, model takes estimates of the cash a company may generate in the future and discounts those amounts back to today to arrive at an estimate of what the business could be worth now.

For Bilibili, the model used is a 2 Stage Free Cash Flow to Equity approach, based on cash flow projections expressed in CN¥. The latest twelve month free cash flow figure is CN¥5,276.70 million. Analyst inputs and subsequent extrapolations point to projected free cash flow of CN¥12,487.92 million in 2035, with interim years such as 2026 and 2029 sitting between these two points.

When these projected cash flows are discounted back, Simply Wall St’s model arrives at an estimated intrinsic value of US$46.58 per share, compared with the recent share price of about US$21.46. On this basis, the DCF suggests an implied discount of 53.9%, which indicates that the shares are trading well below this model’s estimate of value.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Bilibili is undervalued by 53.9%. Track this in your watchlist or portfolio, or discover 53 more high quality undervalued stocks.

Approach 2: Bilibili Price vs Earnings

For companies that are generating earnings, the P/E ratio is a useful way to see how much you are paying for each dollar of profit, and to compare that price with other businesses. What counts as a “normal” P/E often depends on how quickly earnings are expected to grow and how risky those earnings are, with higher growth and lower perceived risk usually supporting a higher multiple.

Bilibili currently trades on a P/E of 51.22x. This sits above both the Interactive Media and Services industry average P/E of 17.74x and the peer group average of 17.91x, so the market is currently putting a higher price on its earnings than on many similar companies.

Simply Wall St’s Fair Ratio for Bilibili is 28.45x. This is a proprietary estimate of what Bilibili’s P/E might be, given factors such as its earnings growth profile, industry, profit margins, market capitalization and specific risks. Because it adjusts for these company level characteristics, the Fair Ratio can be more informative than a simple comparison with industry or peer averages. With the current P/E of 51.22x sitting above the Fair Ratio of 28.45x, the shares screen as overvalued on this metric.

Result: OVERVALUED

P/E ratios tell one story, but what if the real opportunity lies elsewhere? Start investing in legacies, not executives. Discover our 18 top founder-led companies.

Upgrade Your Decision Making: Choose your Bilibili Narrative

Earlier it was mentioned that there is an even better way to understand valuation. This is where Narratives come in, giving you a clear story that connects your view of Bilibili’s business to specific forecasts and a Fair Value that you can compare with the current share price.

A Narrative on Simply Wall St is your structured version of that story, where you spell out what you think could happen to Bilibili’s revenue, earnings and margins. The platform then translates those assumptions into a financial forecast and a Fair Value estimate.

These Narratives live in the Community page on Simply Wall St, are used by millions of investors, and are updated automatically when new information such as earnings or news is added. This means your Fair Value always reflects the latest data rather than a static spreadsheet.

For example, one Bilibili Narrative on the optimistic side uses a Fair Value of about US$37.90 per share, while a more cautious Narrative uses a Fair Value of about US$23.05. Comparing either of these to the current share price can help you decide whether, for your chosen story, Bilibili looks closer to fully priced or offers a margin between Price and Fair Value.

Do you think there's more to the story for Bilibili? Head over to our Community to see what others are saying!

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.