On Tuesday, Citi updated its outlook on Momo Inc . (NASDAQ: NASDAQ:MOMO), reducing the price target to $5.70 from the previous $6.40, while keeping a Neutral rating on the stock. The adjustment follows Momo's first-quarter 2024 earnings report, which revealed revenues surpassing expectations by 4% and adjusted earnings ahead of the Bloomberg consensus, attributed to lower marketing costs than anticipated.
For the second quarter of 2024, Momo has guided revenues to be between Rmb2.65 billion and Rmb2.75 billion. This forecast aligns closely with market consensus. The company has indicated plans to invest more in the development of new overseas applications and in enhancing the user experience for its Tantan app. These investments are expected to pressure margins without significantly boosting short-term revenues.
Momo's core revenue streams are predicted to remain stable, with the live streaming segment facing challenges. However, revenue from new apps is expected to grow. Meanwhile, Tantan's revenue might see a sequential decline as the company scales back its live streaming operations.
InvestingPro Insights
Momo Inc. (NASDAQ: MOMO) has been navigating through a challenging period, yet certain metrics hint at underlying strengths in its financial posture. A glance at real-time data from InvestingPro shows a market capitalization of $1.02 billion, showcasing the company's substantial size in its sector. Even more compelling is the P/E ratio, which at 3.74 for the last twelve months as of Q4 2023, indicates that the stock might be undervalued when considering its earnings. This is reinforced by a PEG ratio of just 0.11 for the same period, suggesting potential for growth at a rate that could outpace its earnings multiple.
Two InvestingPro Tips highlight strategic moves by Momo that could be of interest to investors. Firstly, the management's aggressive share buybacks could signal confidence in the company's value proposition and a commitment to enhancing shareholder value. Secondly, the fact that Momo holds more cash than debt on its balance sheet is a reassuring sign of financial stability, which is particularly important for investors during uncertain economic times.
For those intrigued by these insights, there are additional tips available on InvestingPro, which could further inform investment decisions regarding Momo. By using the coupon code PRONEWS24, investors can get an additional 10% off a yearly or biyearly Pro and Pro+ subscription to access these valuable insights. Currently, there are 14 additional InvestingPro Tips for Momo listed, which can provide a deeper understanding of the company's financial health and future prospects.
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