Hello Group (MOMO) AI Stock Analysis

• Market Cap: $953.49M
• Dividend Yield: N/A
• Average Volume (3M): 1.42M
• Price to Earnings (P/E): 6.9
• Beta (1Y): 0.67
• Revenue Growth: -13.37%
• EPS Growth: -44.13%
• Country: US
• Employees: 1,382
• Sector: Communication Services
• Sector Strength: 98
• Industry: Internet Content & Information
• EPS (TTM): 0.78
• Shares Outstanding: 136,143,250
• 10 Day Avg. Volume: 1,139,424
• 30 Day Avg. Volume: 1,424,851
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.75
• Price to Cash Flow (P/CF): N/A
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $13.00
• Price Target Upside: 134.66% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1

Hello Group faces notable challenges with declining revenues and profitability in its core apps, despite growth in overseas business and new apps. The stock is technically bearish but may be undervalued, presenting potential for upside if strategic initiatives succeed. The overall outlook remains cautious, with a focus on enhancing profitability and cost management.

Positive Factors

Overseas Growth

MOMO's overseas operations saw strong growth and will remain a key growth driver for future financial performance.

Shareholder Confidence

Hello Group Inc. has announced a $50M special cash dividend per ADS and expanded its share repurchase programs by $200M, indicating confidence in its financial health.

Negative Factors

Profitability Challenges

Investments and operating deleverage may pressure margins, with profitability expected to bottom out, affecting financial stability.

Streaming Business

The streaming business is under pressure due to weak macroeconomic conditions and reduced cooperation with MCNs, likely impacting growth negatively.

Hello Group Business Overview & Revenue Model

Company Description

Hello 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 Money

Hello Group generates revenue primarily through value-added services, including membership subscriptions and virtual gift sales. The company offers premium memberships that provide users with enhanced features and functionalities within its applications. Additionally, Hello Group capitalizes on its live video streaming services by enabling users to purchase virtual gifts, which can be sent to content creators during broadcasts. Beyond value-added services, the company earns revenue from advertising, where businesses pay to reach the platform's large user base. Key partnerships with payment services and media companies also contribute to its earnings by facilitating transactions and expanding content offerings.

Hello Group Financial Statement Overview

Summary

Hello Group's financial performance reflects revenue and profitability challenges amidst a dynamic industry environment. The income statement indicates a need for strategic improvements, while the balance sheet shows stability with manageable leverage. Cash flow management is resilient but requires enhanced stability in free cash flow generation.

Income Statement

The company has experienced a declining revenue trend over the past few years. The gross profit margin remains moderate, indicating some efficiency in cost management. However, the net profit margin has been volatile, with significant fluctuations in net income. The EBIT and EBITDA margins show a decline, reflecting challenges in maintaining operational profitability.

Balance Sheet

Hello Group maintains a reasonable debt-to-equity ratio, suggesting a balanced approach to leveraging. The equity ratio indicates a good level of financial stability. However, the return on equity has been inconsistent due to varying net income levels. The company has managed to keep its liabilities in check relative to its assets.

Cash Flow

The cash flow situation shows a mixed picture. Operating cash flow relative to net income has been positive, indicating effective cash generation from operations. However, the free cash flow has seen fluctuations, affecting the company's ability to consistently fund operations and growth initiatives without external financing.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
10.56B	12.00B	12.70B	14.58B	15.02B
	Gross Profit
4.12B	4.98B	5.28B	6.19B	7.05B
	EBIT
1.53B	2.31B	1.63B	2.38B	2.53B
	EBITDA
1.59B	2.79B	1.74B	175.95M	2.90B
	Net Income Common Stockholders
1.04B	1.96B	1.48B	-2.92B	2.10B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
6.15B	6.89B	10.62B	8.43B	10.93B
	Total Assets
18.38B	16.23B	15.83B	18.11B	23.22B
	Total Debt
4.58B	2.29B	2.77B	4.83B	4.93B
	Net Debt
458.53M	-3.33B	-2.25B	-739.22M	1.56B
	Total Liabilities
6.95B	4.24B	4.90B	7.53B	8.39B
	Stockholders Equity
11.43B	11.80B	10.93B	10.59B	14.84B
Cash Flow		Free Cash Flow
1.35B	1.70B	1.15B	1.46B	2.96B
	Operating Cash Flow
1.64B	2.28B	1.23B	1.56B	3.08B
	Investing Cash Flow
-558.89M	2.41B	1.72B	2.55B	-748.47M
	Financing Cash Flow
236.20M	-1.70B	-3.43B	-1.79B	-1.50B

Hello Group Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 5.54
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

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 5.54 is below the 20-day moving average (MA) of 6.40, below the 50-day MA of 7.08, and below the 200-day MA of 6.92, indicating a bearish trend. The MACD of -0.30 indicates Positive momentum. The RSI at 33.57 is Neutral, neither overbought nor oversold. The STOCH value of 12.18 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for MOMO.

Hello Group Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TME	80 Outperform	$20.90B	21.12	10.75%	1.11%	0.63%	34.09%
YELP	79 Outperform	$2.17B	17.17	17.79%	―	5.61%	37.61%
WB	61 Neutral	$2.02B	6.90	8.74%	―	-0.29%	-12.84%
MOMO	61 Neutral	$953.49M	6.87	8.94%	―	-13.37%	-44.13%
Sector *	58 Neutral	$25.04B	3.23	-10.53%	4.39%	2.30%	-43.13%
JOYY	52 Neutral	$2.02B	―	-2.96%	―	-1.33%	-148.56%
NBIS	49 Neutral	$5.52B	189.78	-9.36%	―	-98.74%	-128.03%