JOYY (YY) AI Stock Analysis

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JOYY

(NASDAQ:YY)

52Neutral

JOYY's overall score is impacted by declining financial performance, with notable issues in revenue and profitability. However, the company has a strong balance sheet with low leverage. Technical indicators suggest bearish momentum, and valuation concerns persist due to the negative P/E ratio. The earnings call provided a positive outlook on non-GAAP profits and strategic growth areas, offering some optimism amidst the challenges.

Positive Factors

Acquisition

The finalized sale of YY Live to Baidu for $2.1 billion in cash has removed uncertainty and mitigated downside risks to the company's net cash position.

Capital Returns

Management is expected to increase capital returns to shareholders, potentially including cash dividends in addition to its ongoing buyback.

Stock Upgrade

YY stock has been upgraded to Buy with a set price target of $63 following the clearance of the overhang from the YY Live sale.

Negative Factors

Deal Uncertainties

Uncertainties related to the Baidu & YY Live deal remain, and any updates could ease market concerns.

Regulatory Environment

Domestic audio streaming is under transition with further business adjustment amid a tightened regulatory environment.

JOYY (YY) vs. S&P 500 (SPY)

Market Cap

$2.19B

Dividend YieldN/A

Average Volume (3M)951.49K

Price to Earnings (P/E)14.6

Beta (1Y)0.72

Revenue Growth-1.33%

EPS Growth-148.56%

CountryUS

Employees7,449

SectorCommunication Services

Sector Strength77

IndustryInternet Content & Information

Share Statistics

EPS (TTM)-2.73

Shares Outstanding35,733,160

10 Day Avg. Volume1,277,536

30 Day Avg. Volume951,490

Financial Highlights & Ratios

PEG RatioN/A

Price to Book (P/B)N/A

Price to Sales (P/S)1.13

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

$61.03

Price Target Upside44.90% Upside

Rating ConsensusStrong Buy

Number of Analyst Covering3

JOYY Business Overview & Revenue Model

Company DescriptionJOYY Inc., together with its subsidiaries, operates social media platforms that offer users engaging and experience across various video and audio-based social platforms. The company operates Bigo Live, a live streaming platform that allows users to live stream specific moments, such as showcase talents, socialize, and connect with other users worldwide; Likee, a short-form video social platform that focuses on enabling users to create short-form video; Hago, a casual game-oriented social platform; and imo, a chat and instant messaging application with functions, including video calls and other communication tools, such as group calls, document sharing, etc.. It operates in the People's Republic of China, the United States, the Great Britain, Japan, South Korea, Australia, the Middle East, and Southeast Asia and others. The company was formerly known as YY Inc. and changed its name to JOYY Inc. in December 2019. JOYY Inc. was founded in 2005 and is headquartered in Singapore.

How the Company Makes MoneyJOYY Inc. generates revenue primarily through its live streaming services. The company employs a virtual gifting model, where users purchase virtual items and gifts to send to content creators during live streams. These purchases are made using in-app currencies, which are bought with real money. JOYY also earns revenue from advertising on its platforms, as businesses pay to reach the company's broad and engaged user base. In addition to these revenue streams, JOYY may engage in strategic partnerships and collaborations that enhance its service offerings and expand its market presence, further contributing to its financial performance.

JOYY Financial Statement Overview

Summary

JOYY faces challenges with declining revenues and profitability, reflected in negative net income and EBIT margins. However, the company maintains a strong balance sheet with low debt levels. Cash flow issues need attention to ensure liquidity and operational efficiency. Overall, JOYY needs to focus on reversing revenue decline and improving cost management.

Income Statement

Neutral

JOYY has shown a declining revenue trend with a decrease from $2.62 billion in 2021 to $2.24 billion in 2024. The gross profit margin decreased slightly from 32% in 2023 to 36% in 2024, indicating a drop in efficiency. The net profit margin turned negative in 2024, reflecting challenges in controlling costs. EBIT and EBITDA margins deteriorated, with EBIT turning negative in 2024, signaling operational inefficiencies.

Balance Sheet

Positive

The balance sheet remains strong with a high equity ratio of 62.7% in 2024, indicating financial stability and low leverage. The debt-to-equity ratio is very low, at 0.01, showcasing prudent debt management. However, the return on equity has turned negative due to the net loss, signaling a need for improved profitability.

Cash Flow

Neutral

The cash flow statement reflects challenges with zero free cash flow and operating cash flow in 2024, indicating potential liquidity concerns. The free cash flow to net income ratio is non-calculable due to negative net income, and the operating cash flow to net income ratio is not available, highlighting potential cash management issues.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
2.24B	2.27B	2.41B	2.62B	2.03B
	Gross Profit
806.20M	813.03M	852.13M	837.90M	569.60M
	EBIT
-405.63M	28.82M	50.73M	-111.64M	―
	EBITDA
167.63M	422.42M	158.71M	119.81M	292.59M
	Net Income Common Stockholders
-147.62M	301.82M	600.00M	-103.33M	―
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
1.81B	3.69B	3.94B	4.39B	3.55B
	Total Assets
7.52B	8.48B	9.07B	9.12B	8.08B
	Total Debt
31.04M	488.53M	907.58M	940.85M	913.05M
	Net Debt
-413.72M	-575.42M	-306.87M	-896.33M	-827.46M
	Total Liabilities
2.76B	3.19B	3.57B	3.49B	1.78B
	Stockholders Equity
4.71B	5.16B	5.18B	5.53B	6.23B
Cash Flow		Free Cash Flow
0.00	213.57M	247.28M	25.54M	362.27M
	Operating Cash Flow
0.00	295.58M	316.49M	210.42M	524.10M
	Investing Cash Flow
0.00	420.37M	-510.28M	789.59M	828.82M
	Financing Cash Flow
0.00	-841.75M	-321.91M	-723.54M	―

JOYY Technical Analysis

Technical Analysis Sentiment

Negative

Last Price42.12

Price Trends

50DMA

45.62

Negative

100DMA

42.58

Negative

200DMA

38.37

Negative

Market Momentum

MACD

-1.40

Positive

RSI

39.72

Neutral

STOCH

22.94

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For YY, the sentiment is Negative. The current price of 42.12 is below the 20-day moving average (MA) of 43.30, below the 50-day MA of 45.62, and above the 200-day MA of 38.37, indicating a bearish trend. The MACD of -1.40 indicates Positive momentum. The RSI at 39.72 is Neutral, neither overbought nor oversold. The STOCH value of 22.94 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for YY.

JOYY Risk Analysis

JOYY disclosed 91 risk factors in its most recent earnings report. JOYY 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

JOYY Peers Comparison

Overall Rating

UnderperformOutperform

Sector (58)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TME	80 Outperform	$21.54B	20.87	10.75%	1.06%	0.63%	34.09%
BILI	66 Neutral	$6.80B	―	-9.43%	―	17.42%	72.64%
MOMO	61 Neutral	$953.49M	7.05	8.94%	―	-13.37%	-44.13%
Sector *	58 Neutral	$25.97B	3.12	-10.67%	4.37%	2.16%	-43.01%
YY	52 Neutral	$2.19B	14.64	-2.96%	―	-1.33%	-148.56%
DOYU	49 Neutral	$195.70M	―	-5.43%	―	-24.10%	-953.50%
HUYA	47 Neutral	$693.33M	―	-1.59%	―	-20.51%	67.41%

* Communication Services Sector Average

Performance Comparison

JOYY

38.14

5.76

17.79%

MOMO

Hello Group

5.27

0.10

1.93%

BILI

Bilibili

16.68

5.42

48.13%

HUYA

Huya

3.14

0.02

0.64%

TME

Tencent Music Entertainment Group

12.23

1.22

11.08%

DOYU

DouYu International Holdings

6.05

4.60

317.24%

JOYY Earnings Call Summary

Earnings Call Date: Mar 20, 2025 | % Change Since: -10.15% | Next Earnings Date: Jun 3, 2025

Earnings Call Sentiment Positive

JOYY's earnings call presented a strong focus on global expansion and non-livestreaming revenue growth, with substantial profitability and shareholder returns. However, challenges such as a decline in livestreaming revenue and significant goodwill impairment charges were noted. Despite these challenges, the positive highlights, particularly in non-GAAP net profit and robust non-livestreaming growth, outweigh the lowlights.

Highlights

Strong Global Revenue Growth

In 2024, JOYY's global market revenue, excluding Mainland China, accounted for 89.6% of total revenue. Developed Countries saw a year-over-year revenue increase of 24.6%, boosting their share of the group's revenue to 53.9%.

Record Non-GAAP Net Profit

JOYY achieved a non-GAAP net profit of $96.1 million in the fourth quarter, up 57.1% quarter-over-quarter. For the full year 2024, the non-GAAP net profit was $298.5 million, a year-over-year increase of 2.0%.

BIGO Segment Performance

BIGO achieved revenues of $1.99 billion in 2024, a year-over-year increase of 3.3%, and a non-GAAP net profit of $314.6 million, up 4.2% year-over-year.

Robust Non-Livestreaming Revenue Growth

Non-livestreaming revenue increased 55.9% year-over-year to $449.8 million in 2024, accounting for 20.1% of total group revenue, up 7.4 percentage points from 2023.

Shareholder Returns

In 2024, JOYY repurchased 9.21 million ADSs for $309.2 million and announced a quarterly cash dividend program totaling $600 million over three years, alongside a $300 million share repurchase program until 2027.

Lowlights

Livestreaming Revenue Decline

The group experienced a decline in livestreaming revenue due to adjustments in BIGO’s non-core audio livestreaming product and a temporary removal from platforms, though it still met revenue guidance due to strong performance in other areas.

Goodwill Impairment Charges

Non-cash goodwill impairment charges of $454.9 million were recorded, primarily due to lower valuations amid current market conditions affecting prior acquisitions.

Decreased Group Net Revenues

Total net revenues for the fourth quarter decreased to $549.4 million, down from $569.8 million in the same period last year.

Company Guidance

In the fourth quarter of 2024, JOYY Inc. reported a group revenue of $549.4 million, with a non-GAAP net profit of $96.1 million, marking a 57.1% increase quarter-over-quarter. The BIGO segment, a core business unit, generated $480 million in revenue and achieved a non-GAAP operating profit of $81 million, up 11.2% sequentially. For the entire year, JOYY's group revenue totaled $2.24 billion, with a non-GAAP net profit of $298.5 million, indicating a 2.0% year-over-year rise. The BIGO segment alone contributed $1.99 billion in revenue, experiencing a 3.3% increase year-over-year, and a non-GAAP net profit of $314.6 million, up by 4.2%. The company emphasized its strategic focus on enhancing monetization in developed markets, leading to a 24.6% revenue growth in these regions, now comprising 53.9% of total revenue. Additionally, JOYY's non-livestreaming revenue saw a significant 55.9% year-over-year growth, reaching $449.8 million, and is expected to maintain double-digit growth in 2025. The company also announced a quarterly cash dividend program amounting to $600 million over three years and a new share repurchase plan of $300 million through December 2027, reflecting a commitment to optimizing shareholder value.

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.