JOYY may gain 57% over the year. Is it a Strong buy?

JOYY is a major social media and online digital streaming platform. It is also a Chinese stock. Western investors sometimes overlook China, as the country is highly insular due to both government policy and cultural history. But don’t forget that China has an online population of nearly 800 million.

This means that China’s domestic market only has double the population of Europe, and more than double the population of the U.S. If you add China’s moves toward the global stage, the possibilities will be staggering.

JOYY’s share growth is awe-inspiring. The stock skyrocketed by 50% year-to-date; JOYY simply shrugged off the corona quarter, while other companies succumbed and suffered severe losses. 

The stock’s first-quarter net revenue rose to $1.01 billion, gaining 49% year-over-year. Strong growth across the firm’s online subsidiaries powered the gains, as the average monthly users reached 520.1 million.

Singapore’s Bigo live-streaming platform has been the most profitable of its products. It’s responsible for the major part of JOYY’s growth in recent months. The company bought Bigo in May 2019 for a value of $2.1 billion. After that, Bigo became the world’s fifth-largest site for streaming apps.

What do analysts say?

JPMorgan’s analyst, Alex Yao, reviewed JOYY stock. He believes that the current share price hasn’t fully factored in Bigo’s growth potential. Thus, Yao expects a strong Bigo revenue growth in the second quarter of 2020. It will turn even more profitable in the fourth quarter of 2020.

Considering all of this, Yao rated the stock as a Buy and increased his price target to $125. Such a price target implies a strong upside potential of 57% over the next year.

Wall Street analysts agree with JPM about the quality of JOYY stock. The shares got a unanimous Strong Buy consensus rating. The stock is currently trading for $81.45, with an average target of $104.17, suggesting a 28% upside potential.