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Sunday, January 17, 2021

Momo Inc. (NASDAQ:MOMO) on the Path to Ruin

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Momo Inc. (MOMO) shares are trading at lower $13.59 and the avg recommendation for the stock is Moderate Buy, while the current analyst price target stands at $21.08.

To add more color to this target, the company’s high over the last year is $39.42 and the low is $12.93. Over the last 52 weeks, MOMO is down -62.10% while the S&P 500 is up 18.53%. The catalyst for this interesting swing was the company’s recent earnings report.

A Notable Earnings Report

In the last quarter, MOMO reported a profit of $257.14 million. Momo Inc. also saw revenues increase to $554.77 million. In addition, MOMO has free cash flow of $284.81 million as of 09-2020. The company’s EBITDA came in at $92.29 million which compares well with its peers.

MOMO booked profit margins of 15.80%, its Return on Equity (ROE) is 18.20%, and its Return on Assets is 11.00%. All told, it is clear that, MOMO needs to be on your watchlist.

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Of course, we must look beyond the financials and question how well those numbers represent the sustainable earnings power of the business. Investors need to know how sustainable this current run. MOMO has a short ratio of 1.58 and outstanding shares of 208.94M.

Company Outlook

MOMO has seen increased volume after this news and investors are putting their support behind the value proposition. Furthermore, 10-day volume stands at 6.44 million and more growth is possible in the weeks ahead. Traders will also note the company’s earnings per share came in at 1.69. Momo Inc. MOMO also noted assets of $3.36 billion at the end of the last quarter. Investors should also keep an eye on sector updates as MOMO has historically followed its peers on positive news.

All told, Momo Inc. MOMO has strung together solid data and demonstrated underlying fundamentals. At its current valuation, MOMO represents an interesting risk/reward case. Traders should stay tuned to see if this recent report will push the stock to test recent resistance levels.

Momo Inc. MOMO is now commanding a market cap of 2.88B and a float of 163.27M. MOMO is increasing its credibility in this sector and that could lead to more upside down the line. Sign-up for continuing coverage on shares of MOMO stock, as well as other hot stock picks, get our free newsletter today and get our next breakout pick!

Disclosure: we hold no position in MOMO, either long or short, and we have not been compensated for this article.

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