Lizhi Stock Analysis, Forecast & Price Prediction: 5 Reasons to Buy LIZI Shares

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Lizhi (LIZI) stock announced a partnership with Xpeng (XPEV), which put the stock on my radar. They are the #1 largest user generated content audio app in China with over 56 million MUAs (as of Q3 2020).

LIZI Stock Analysis Breakdown

Here are 5 reasons why I’m buying LIZI stock:

  1. Undervalued – LIzi stock generates around $200 million in revenue yet the market cap is under $200 million. That gives us a P/S ratio of around 1. Clearly, the stock is undervalued since user generated content apps tend to grow over time (think Facebook, Twitter, Youtube, Spotify)
  2. Xpeng Partnership – The Xpeng partnership will generate more revenue and new listeners on the platform. At just a small market cap, this new partnership allows Lizhi to benefit from the power of proximity.
  3. Cheap Chinese exposure – It’s time to add Chinese stocks to my portfolio since I don’t currently have any positions. Lizhi looks cheap and I wanted to get in on the ground floor.
  4. PCAOB registered auditor – The house passed a bill to delist foreign companies that don’t used PCAOB registered accountants. Lizhi uses the same independent auditor as Nio, Pricewaterhousecoopers Zhong Tian LLP.
  5. Mobile is the future – As more people get connected to the internet, mobile apps will see tremendous growth in the future. I think Lizhi can benefit from this boom in technology.

Future LIZI Stock Forecast & Price Prediction

I bought some shares @ $4.22 and plan to add to my position over time. Lizhi provides plenty of diversity to my portfolio and adds a proven audio app that can continue to generate cashflow in the future. User generated content is big business and let’s hope Lizhi cashes in!

Revenue was up 10% YoY and the new partnership will accelerate this trend. As revenue increases, the company will attract new buyer interest.

If we give Lizhi a conserative P/S ratio of 5 to 10 then the stock could be worth $20 to $40 in the near future. It’s simply undervalued and underappreciated as a whole.

Future LIZI Stock Price Target = $20 to $40

Remember, this is just a projection based on my personal research. Do your own research and use stop loss orders to limit your downside risk. Thanks for reading!

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