Jefferies raises Kanzhun stock price target to $24 on solid execution

Jefferies has raised its price target on Chinese online recruitment platform Kanzhun Ltd. (NASDAQ:BZ) to $24.00 from $20.00, while maintaining a Buy rating, following robust second-quarter results. Kanzhun's Q2 revenue aligned with consensus, while non-GAAP net profit surpassed expectations due to effective cost control, showcasing strong operational efficiency with an 83.4% gross profit margin and 18.8% revenue growth. Jefferies anticipates continued core business acceleration in Q3, driven by a recovering hiring market and the company's leveraging of AI capabilities, reinforcing its strong execution and market penetration.

Analysis

Jefferies has raised its price target on Kanzhun Ltd. (BZ) to $24.00 from $20.00, maintaining a Buy rating, reflecting confidence in the company's growth trajectory. This revision is underpinned by Kanzhun's second-quarter results, where it demonstrated significant operational strength; revenue grew 18.8%, aligning with consensus, while an impressive gross profit margin of 83.4% and effective cost controls led to a non-GAAP net profit beat. The stock has already seen a substantial rally, up over 52% year-to-date and trading near its 52-week high. Looking forward, the company's Q3 revenue guidance is in line with expectations, but Jefferies anticipates an acceleration in the core business. This optimism is fueled by a recovery in hiring demand, evidenced by rising job postings, and the strategic leverage of Kanzhun's AI capabilities to enhance platform value for both recruiters and job seekers, supporting its market penetration efforts.

Key Decisions for Investors

• Given the strong fundamental performance, including an 83.4% gross margin and positive analyst sentiment, investors could view the current momentum as justified and consider the potential for further upside towards the new $24 price target.
• Investors should closely monitor macroeconomic indicators related to Chinese hiring demand, as the forecasted Q3 business acceleration is highly dependent on this recovery continuing.
• While the stock has rallied over 52% YTD, investors should be mindful of its position near a 52-week high, which could present technical resistance or lead to consolidation before any further advance.
• The firm's AI technology is cited as a key advantage; its successful implementation and impact on user engagement and market share will be critical metrics to watch in subsequent earnings reports.