Hello Group (MOMO) AI Stock Analysis

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Hello Group

(NASDAQ:MOMO)

Select Model

Neutral 64 (OpenAI - 5.2)

Rating:64Neutral

Price Target:

$6.50

▼(-6.88% Downside)

Action:ReiteratedDate:03/20/26

The score is driven primarily by solid financial stability (especially the conservative balance sheet) and supportive valuation (low P/E), partially offset by weakening operating trends (shrinking revenue, compressed margins, softer free cash flow) and bearish technical signals with the stock trading below major moving averages.

Positive Factors

Overseas Revenue Growth

Significant growth in overseas revenue indicates successful international expansion, diversifying income sources and reducing reliance on domestic markets.

AI Integration

AI integration enhances user experience and engagement, potentially increasing user retention and monetization, supporting long-term growth.

Cash Flow Conversion

Efficient cash conversion supports operational stability and provides financial flexibility for strategic investments and debt management.

Negative Factors

Revenue Decline

Declining revenue reflects challenges in maintaining growth, potentially impacting profitability and market competitiveness if not addressed.

Decrease in Paying Users

A reduction in paying users indicates potential issues in user engagement or competition, which could affect revenue from value-added services.

Withholding Tax Adjustment

Increased tax expenses reduce net income, impacting financial performance and potentially limiting resources for reinvestment and growth.

Hello Group (MOMO) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$970.67M

Dividend YieldN/A

Average Volume (3M)732.14K

Price to Earnings (P/E)9.7

Beta (1Y)0.49

Revenue Growth-4.66%

EPS Growth-38.42%

CountryUS

Employees1,390

SectorCommunication Services

Sector Strength97

IndustryInternet Content & Information

Share Statistics

EPS (TTM)0.10

Shares Outstanding116,883,500

10 Day Avg. Volume653,464

30 Day Avg. Volume732,141

Financial Highlights & Ratios

PEG Ratio-0.58

Price to Book (P/B)0.69

Price to Sales (P/S)0.75

P/FCF Ratio11.33

Enterprise Value/Market Cap1.82

Enterprise Value/Revenue0.17

Enterprise Value/Gross Profit0.46

Enterprise Value/Ebitda1.28

Forecast

1Y Price TargetN/A

Price Target UpsideN/A

Rating ConsensusN/A

Number of Analyst Covering0

EPS Forecast (FY)5.94

Revenue Forecast (FY)$10.17B

Hello Group Business Overview & Revenue Model

Company DescriptionHello Group Inc. provides mobile-based social and entertainment services in the People's Republic of China. It operates Momo platform that includes its Momo mobile application, as well as various related properties, features, functionalities, tools, and services. The company's Momo mobile application connects people and facilitates interactions based on location and interests; and various recreational activities, including live talent shows, short videos, and social games, as well as other video- and audio-based interactive experiences, such as online parties, mobile karaoke, and user participated reality shows. It also operates Tantan, a social and dating application, which enables users to find and establish romantic connections, and meet interesting people; and provides live video, quick chat, value-added, mobile marketing, and other services, as well as mobile games and audio chatrooms. In addition, it allows its platform's users to livestream a variety of content and activities that comprise talent shows, such as singing, dancing, and talk shows, as well as casual chatting, and other forms of interactions between broadcasters and viewers. The company was formerly known as Momo Inc. and changed its name to Hello Group Inc. in August 2021. Hello Group Inc. was incorporated in 2011 and is headquartered in Beijing, the People's Republic of China.

How the Company Makes MoneyHello Group generates revenue primarily from services offered within its mobile applications. Historically, a major revenue stream has been live video services on Momo, where the company earns money from users purchasing virtual gifts and other paid features during live interactive sessions, with Hello Group retaining a portion of the proceeds. The company also monetizes through value-added services (VAS), which typically include in-app subscriptions and à-la-carte purchases that unlock premium features (for example, enhanced discovery, visibility, and other paid privileges) across its apps. In addition, the company earns revenue from mobile marketing/advertising by selling ad placements and promotional exposure within its products. Tantan, its dating-focused app, is monetized mainly via VAS such as subscriptions and in-app purchases that provide premium matching and interaction features. Any significant partnerships or specific revenue-share terms beyond these general mechanisms are null.

Hello Group Key Performance Indicators (KPIs)

Any

Revenue by Segment

Revenue by Segment
Reveals how different parts of the business contribute to overall revenue, highlighting areas of strength and potential growth or decline within the company’s operations.

Chart InsightsHello Group's Mobile Games revenue has ceased entirely by mid-2024, indicating a strategic exit or significant market shift. Live Video Service revenue is declining steadily, suggesting challenges in maintaining user engagement or competition pressures. Conversely, Games and Related Value Added Services show a strong rebound in 2025, potentially driven by new offerings or market expansion. Mobile Marketing and Other Services also exhibit a resurgence in 2025, hinting at diversification efforts or successful marketing strategies. This mixed performance highlights the company's adaptation to changing market dynamics and strategic pivots.

Data provided by:

The Fly

Hello Group Earnings Call Summary

Earnings Call Date:Sep 09, 2025

(Q2-2025)

% Change Since: |

Next Earnings Date:Jun 09, 2026

Earnings Call Sentiment Neutral

The earnings call presented a mixed picture, with significant growth in overseas revenue and advancements in AI integration being overshadowed by declines in overall and domestic revenue, and a notable one-off tax expense. While there is optimism in overseas expansion and technology adoption, challenges remain in domestic performance and tax implications.

Q2-2025 Updates

Positive Updates

Overseas Revenue Growth

Overseas business revenue reached RMB 442 million, up 73% year-over-year and 7% quarter-over-quarter, now accounting for 17% of the group revenue compared to 10% in the same period last year.

AI Integration and Innovation

The company has successfully integrated AI into its social products, enhancing user experience, with efforts including AI greeting and chat assistant features, as well as launching a stand-alone AI character role play app in Japan.

Non-GAAP Net Income Increase

Excluding a one-off tax expense, non-GAAP net income for the quarter would have been RMB 451.9 million, up 1% from Q2 last year and 12% from last quarter.

Stabilization and Growth in Tantan International

Tantan International revenue has stabilized after a strategic shift to focus on core dating experience, with a plan to expand further in Southeast Asia.

Negative Updates

Overall Revenue Decline

Total group revenue was RMB 2.62 billion, down 3% year-over-year, with domestic revenue reaching RMB 2.18 billion, down 11% year-over-year.

Withholding Tax Adjustment

The company accrued a withholding income tax expense of RMB 547.9 million due to a change in the applicable tax rate from 5% to 10% by Chinese tax authorities, impacting prior periods.

Decrease in Momo Value-Added Services Revenue

Momo value-added service revenue reached RMB 1.85 billion, down 11% year-over-year, mainly due to soft spending sentiment among high-paying users amid a weak macro environment.

Decrease in Paying Users

Momo app had 3.5 million paying users, a sequential decrease of 0.6 million, and Tantan had 740,000 paying users, a decrease of 80,000 from Q1.

Company Guidance

During the second quarter of 2025, Hello Group reported a total revenue of RMB 2.62 billion, a decline of 3% year-over-year, with domestic revenue at RMB 2.18 billion, down 11%, and overseas revenue at RMB 442 million, up 73%. The adjusted operating income was RMB 448 million, with a margin of 17%. The company focused on maintaining the productivity of its cash cow business, Momo, and improving Tantan's core dating experience. Momo's app enhancements, including AI features, helped stabilize user retention, achieving 3.5 million paying users, albeit a sequential decrease of 0.6 million. Tantan's revenue was RMB 160 million, down 18% year-over-year, but with an ARPPU increase of 18%. Overseas revenue grew to account for 17% of the total group revenue, driven by social products in the MENA region. For the third quarter, Hello Group projected revenue to be between RMB 2.59 billion and RMB 2.69 billion. The company also discussed adjustments to tax compliance, impacting the financials due to a change in the withholding income tax rate from 5% to 10%, which resulted in a one-off tax expense of RMB 547.9 million.

Hello Group Financial Statement Overview

Summary

Strong balance sheet (very low leverage and solid capitalization) supports resilience, but operating fundamentals are weaker: multi-year revenue contraction, net margin compression, and declining free cash flow with weaker cash conversion. KPI notes add uncertainty around 2025 segment shifts (possible reclassification/concentration risk) and a multi-year decline in monthly active users.

Income Statement

Neutral

Profitability remains positive in 2025 (annual) with healthy operating margins (gross margin ~38%, operating margin ~13%), but the earnings profile has weakened versus prior years. Revenue has been shrinking for several years (2025 down ~3.3% after declines in 2022–2024), and net margin has compressed to ~7.8% from ~16.3% in 2023. The company also showed it can be volatile (large loss in 2021), which lowers confidence in consistency despite remaining profitable recently.

Balance Sheet

Very Positive

The balance sheet looks conservatively positioned in 2025 (annual): debt is very low relative to equity (debt-to-equity ~0.01) and equity is sizable versus assets, indicating strong capitalization. Returns on equity are positive (~7.1%) but down meaningfully from 2022–2023 levels, suggesting profitability has cooled even though leverage risk is minimal. Notably, leverage dropped sharply from 2024 (debt-to-equity ~0.40), which strengthens financial flexibility but also raises questions about year-to-year structure changes.

Cash Flow

Positive

Cash generation is still solidly positive in 2025 (annual), with operating cash flow (~1.15B) and free cash flow (~0.67B) supporting liquidity. However, free cash flow fell sharply (down ~22% in 2025) and now covers only ~58% of net income, implying weaker cash conversion than in prior years. Operating cash flow coverage is also below 1 in 2024–2025, signaling that cash generation is not consistently outpacing reported earnings.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	10.08B	10.71B	12.00B	12.93B	14.39B
Gross Profit	3.79B	4.14B	4.94B	5.34B	6.01B
EBITDA	1.36B	1.55B	2.25B	1.75B	2.07B
Net Income	786.99M	1.05B	1.96B	1.51B	-2.88B
Balance Sheet
Total Assets	13.79B	18.38B	16.23B	15.83B	18.11B
Cash, Cash Equivalents and Short-Term Investments	8.68B	6.15B	6.89B	10.62B	8.43B
Total Debt	128.91M	4.58B	2.29B	2.77B	4.83B
Total Liabilities	2.70B	6.95B	4.24B	4.90B	7.53B
Stockholders Equity	11.09B	11.43B	11.80B	10.78B	10.45B
Cash Flow
Free Cash Flow	671.78M	1.35B	1.70B	1.15B	1.46B
Operating Cash Flow	1.15B	1.64B	2.28B	1.23B	1.56B
Investing Cash Flow	159.99M	-558.89M	2.41B	1.72B	2.55B
Financing Cash Flow	-5.29B	236.20M	-1.70B	-3.43B	-1.79B

Hello Group Technical Analysis

Technical Analysis Sentiment

Negative

Last Price6.98

Price Trends

50DMA

6.55

Negative

100DMA

6.68

Negative

200DMA

7.32

Negative

Market Momentum

MACD

-0.13

Negative

RSI

43.96

Neutral

STOCH

32.36

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MOMO, the sentiment is Negative. The current price of 6.98 is above the 20-day moving average (MA) of 6.30, above the 50-day MA of 6.55, and below the 200-day MA of 7.32, indicating a bearish trend. The MACD of -0.13 indicates Negative momentum. The RSI at 43.96 is Neutral, neither overbought nor oversold. The STOCH value of 32.36 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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 (60)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TME	71 Outperform	$14.79B	17.48	13.77%	1.02%	13.86%	80.97%
MOMO	64 Neutral	$970.67M	9.67	6.76%	―	-4.66%	-38.42%
Z	62 Neutral	$10.90B	717.59	0.47%	―	15.17%	75.90%
Sector *	60 Neutral	$48.67B	4.58	-11.27%	4.14%	2.83%	-41.78%
JOYY	60 Neutral	$2.95B	15.27	31.92%	4.25%	-7.60%	-160.75%
WB	60 Neutral	$2.10B	5.42	12.88%	8.13%	-1.29%	22.48%
NBIS	56 Neutral	$30.59B	208.29	2.48%	―	-87.55%	336.73%

* Communication Services Sector Average

Performance Comparison

MOMO

Hello Group

6.18

-0.06

-0.96%

NBIS

Nebius Group

121.52

94.54

350.41%

Zillow Group Class C

45.54

-25.71

-36.08%

JOYY

59.01

19.97

51.15%

Weibo

8.78

-0.31

-3.39%

TME

Tencent Music Entertainment Group

10.29

-3.54

-25.60%

Glossary

BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

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.Date of analysis: Mar 20, 2026