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Hello Group (MOMO)
NASDAQ:MOMO
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Hello Group
(NASDAQ:MOMO)70Outperform
Hello Group (MOMO) vs. S&P 500 (SPY)
Market Cap
$1.31B
Dividend YieldN/A
Average Volume (3M)1.00M
Price to Earnings (P/E)8.0
Beta (1Y)0.79
Revenue Growth-12.36%
EPS Growth-29.81%
CountryUS
Employees1,382
SectorCommunication Services
Sector Strength85
IndustryInteractive Multi-Media
Share Statistics
EPS (TTM)0.96
Shares Outstanding136,143,250
10 Day Avg. Volume1,332,494
30 Day Avg. Volume1,000,761
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.87
Price to Cash Flow (P/CF)N/A
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$10.00Price Target Upside30.72% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
Hello Group Business Overview & Revenue Model
Company DescriptionHello Group (MOMO) is a prominent Chinese social networking and entertainment company that operates several social apps. The company's core offerings include Momo, a location-based social networking app, and Tantan, a dating app similar to Tinder. These platforms cater to users seeking to establish new relationships, whether for friendship, dating, or other social interactions. Hello Group leverages its technological expertise to enhance user engagement through features such as live streaming, short videos, and interactive gaming elements, aimed at enriching user experience and fostering community building.
How the Company Makes MoneyHello Group primarily generates revenue through a diversified model that includes live video streaming, membership subscriptions, and advertising. The live streaming component is a significant revenue driver, where users purchase virtual gifts for streamers, creating a monetization opportunity through in-app purchases. Membership subscriptions provide premium features and enhancements to users, contributing to a steady income stream. Additionally, the company earns from advertising by allowing brands to promote their products and services to its large user base. The integration of gaming and other interactive features also presents opportunities for in-app purchases, further supporting Hello Group's revenue model. Strategic partnerships and collaboration with content creators and influencers amplify its reach and engagement, thus enhancing its monetization capabilities.
Hello Group Financial Statement Overview
Summary
Hello Group's financial performance shows mixed results. The balance sheet is strong with a healthy equity base and improving leverage. However, the income statement reflects declining revenues and inconsistent profitability, while cash flow statements highlight challenges in maintaining consistent cash generation.Income Statement
The income statement shows declining revenues over the years, with a notable decrease from 2020 to 2024. Gross profit margins have decreased slightly, reflecting reduced efficiency in managing costs relative to revenues. Net profit margins have fluctuated, with a significant improvement in recent periods, moving from negative net income in 2021 to positive in subsequent years. The EBIT and EBITDA margins are stable but show room for improvement.62
Positive
Balance Sheet
The balance sheet is strong overall, with a healthy equity base and a decreasing debt-to-equity ratio, indicating improved leverage management. The equity ratio is robust, showing a stable capital structure with a significant proportion of equity financing. Return on Equity (ROE) has shown improvement, reflecting better profitability management relative to shareholder investment.75
Positive
Cash Flow
Cash flow analysis indicates volatility in free cash flow over the years, with recent periods showing a decline. Operating cash flow remains positive, but the ratio of operating cash flow to net income has varied, indicating potential inconsistencies in cash conversion. Free cash flow to net income shows a declining trend, highlighting challenges in maintaining cash generation relative to profits.68
Positive
| Breakdown | |||||
| TTM | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 | Dec 2019 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 10.93B | 12.00B | 12.70B | 14.58B | 15.02B | 17.02B | Gross Profit |
| 4.44B | 4.98B | 5.28B | 6.19B | 7.05B | 8.52B | EBIT |
| 1.90B | 2.31B | 1.63B | 2.38B | 2.53B | 3.55B | EBITDA |
| 2.19B | 2.79B | 1.74B | 175.95M | 2.90B | 3.91B | Net Income Common Stockholders |
| 1.30B | 1.96B | 1.48B | -2.92B | 2.10B | 2.97B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 10.87B | 6.89B | 10.62B | 8.43B | 10.93B | 14.93B | Total Assets |
| 16.20B | 16.23B | 15.83B | 18.11B | 23.22B | 22.48B | Total Debt |
| 2.74B | 2.29B | 2.77B | 4.83B | 4.93B | 5.15B | Net Debt |
| -2.63B | -3.33B | -2.25B | -739.22M | 1.56B | 2.53B | Total Liabilities |
| 5.74B | 4.24B | 4.90B | 7.53B | 8.39B | 8.76B | Stockholders Equity |
| 10.30B | 11.80B | 10.93B | 10.59B | 14.84B | 13.72B |
| Cash Flow | Free Cash Flow | ||||
| 1.05B | 1.70B | 1.15B | 1.46B | 2.96B | 5.26B | Operating Cash Flow |
| 1.63B | 2.28B | 1.23B | 1.56B | 3.08B | 5.45B | Investing Cash Flow |
| -1.01B | 2.41B | 1.72B | 2.55B | -748.47M | -4.03B | Financing Cash Flow |
| 490.41M | -1.70B | -3.43B | -1.79B | -1.50B | -1.27B |
Hello Group Technical Analysis
Positive
7.65
Price Trends
7.39
Positive
7.18
Positive
6.82
Positive
Market Momentum
0.04
Positive
52.69
Neutral
48.25
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MOMO, the sentiment is Positive. The current price of 7.65 is below the 20-day moving average (MA) of 7.68, above the 50-day MA of 7.39, and above the 200-day MA of 6.82, indicating a neutral trend. The MACD of 0.04 indicates Positive momentum. The RSI at 52.69 is Neutral, neither overbought nor oversold. The STOCH value of 48.25 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for MOMO.
Hello Group Risk Analysis
Hello Group disclosed 73 risk factors in its most recent earnings report. Hello Group reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Hello Group Peers Comparison
Overall Rating
UnderperformOutperform
Sector (59)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $41.76B | 18.39 | 12.91% | ― | 27.28% | 49.14% | |
74 Outperform | $2.52B | 7.51 | 11.05% | ― | 0.99% | -7.37% | |
72 Outperform | $2.67B | 15.71 | 3.99% | ― | -1.94% | ― | |
71 Outperform | $32.90B | 10.14 | 9.37% | ― | -2.60% | 19.69% | |
70 Outperform | $1.31B | 7.97 | 11.25% | ― | -12.36% | -29.81% | |
60 Neutral | $9.41B | ― | -9.43% | ― | 11.73% | 47.68% | |
59 Neutral | $30.54B | 0.25 | -13.23% | 4.04% | 2.36% | -49.53% |
* Communication Services Sector Average
Performance Comparison
MOMO
Hello Group
7.65
1.19
18.42%
BIDU
Baidu
94.80
-6.49
-6.41%
TCOM
Trip.com Group Ltd. Sponsored ADR
63.83
20.54
47.45%
YY
JOYY
48.84
18.96
63.45%
WB
Weibo
10.92
2.50
29.69%
BILI
Bilibili
24.10
11.49
91.12%
Hello Group Earnings Call Summary
Earnings Call Date: Dec 9, 2024 | % Change Since: 13.00% | Next Earnings Date: Mar 12, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed outlook with significant declines in revenue and operating income, particularly for the Momo app and Tantan. However, there was strong growth in the overseas business, which is expected to drive future growth. The sentiment reflects the challenges in the core business areas while highlighting the potential in new markets.Highlights
Overseas Business Growth
Overseas business revenue grew by 41% year-over-year, driven by improvements in operational efficiency and localized operations. Soulchill's revenue in Q3 achieved its highest sequential growth of the past year.
Strong Cash Position
Hello Group has a significant cash position with net cash of approximately $8.7 per share, supporting shareholder returns through buybacks and dividends.
Lowlights
Overall Revenue Decline
Total group revenue for Q3 2024 was RMB 2.67 billion, down 12% year-over-year. Adjusted operating income decreased by 33% year-over-year.
Momo App Revenue Decline
Momo app revenue decreased by 17% year-over-year due to proactive product adjustments and weak macroeconomic conditions.
Tantan Revenue Challenges
Tantan's Q3 total revenue was RMB 212 million, down 28% year-over-year, due to a decrease in the number of paying users.
Company Guidance
In the Q3 2024 earnings call for Hello Group, Inc., the company provided guidance for Q4 and beyond. The company anticipates Q4 revenue to range from RMB 2.56 billion to RMB 2.66 billion, reflecting a year-on-year decline of 11.4% to 14.7%. The Momo app, a core part of the company's cash cow business, reported a Q3 revenue of RMB 2.46 billion, down 10% year-over-year, with 6.9 million paying users, a sequential decrease of 300,000. Meanwhile, Tantan's Q3 revenue was RMB 212 million, experiencing a 28% year-over-year decline due to a decrease in paying users, now at 940,000. The company's new app endeavors, particularly overseas, showed promising growth, with new app revenue reaching RMB 418 million, up 41% year-over-year. The management emphasized a strategic focus on optimizing product experiences and cost management to address the revenue pressures, with an eye on long-term sustainable growth by leveraging overseas market potential. Overall, the company remains committed to maintaining the productivity of its core businesses while exploring new growth avenues, especially in international markets.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.