Hello Group: Strategic Financial Maneuvers and Growth Prospects Drive Buy Rating

Hello Group (MOMO – Research Report), the Communication Services sector company, was revisited by a Wall Street analyst today. Analyst Fawne Jiang from Benchmark Co. maintained a Buy rating on the stock and has a $13.00 price target.

Fawne Jiang has given his Buy rating due to a combination of factors that indicate a potential turnaround for Hello Group. Despite recent earnings falling short of expectations due to one-time expenses, the company has shown better-than-expected revenue performance. Looking forward, the stabilization of the core Momo app and the strong momentum from overseas applications, particularly in the Middle East, are expected to drive growth in the coming years.
Another reason for the Buy rating is the company’s strategic financial maneuvers, including a significant share buyback program and a special cash dividend, which are likely to enhance shareholder value. The company’s solid cash position and projected free cash flow further support the view of Hello Group as a deep value investment. With anticipated positive revenue and earnings growth in the latter half of FY25, these factors collectively underpin the optimistic outlook and Buy recommendation.