Hello Group (MOMO) AI Stock Analysis

• Market Cap: $1.33B
• Dividend Yield: N/A
• Average Volume (3M): 1.23M
• Price to Earnings (P/E): 7.8
• Beta (1Y): 0.57
• Revenue Growth: -11.02%
• EPS Growth: -5.17%
• Country: US
• Employees: 1,390
• Sector: Communication Services
• Sector Strength: 85
• Industry: Internet Content & Information
• EPS (TTM): 0.29
• Shares Outstanding: 120,487,236
• 10 Day Avg. Volume: 2,140,835
• 30 Day Avg. Volume: 1,230,387
• PEG Ratio: -0.11
• Price to Book (P/B): 2.21
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 21.08
• 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: $10.65
• Price Target Upside: 28.78% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2

• Rating: 73 Outperform
• Price Target: $9.50 ▲(14.87%Upside)

The overall stock score is influenced primarily by strong technical performance and a favorable valuation. However, financial performance challenges and mixed earnings call results moderate the score. The strategic focus on overseas growth provides a positive long-term outlook.

Positive Factors

Financial Strategy

The company has announced a $50M special cash dividend per ADS and upsized its share repurchase programs by $200M.

International Expansion

MOMO is evolving into a structurally stronger and more balanced platform with a growing, diversified international portfolio.

Revenue Growth

Overseas revenue surged 73% y/y, now making up 16% of total revenue, driven largely by headcount reductions and improved operating efficiency across core businesses.

Negative Factors

Business Challenges

Tantan remains a weak spot, with operations being trimmed to maintain profitability.

Profit Margins

Investments and operating deleverage may pressure margins, with profitability expected to bottom out in FY25.

User Growth

Tantan remains a weak spot, with challenges in generating a positive growth loop, leading to reduced investment and focus on organic growth, which may put pressure on user growth and revenue in the near future.

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 statements reflect challenges with declining revenue and profitability, although the balance sheet remains stable with reasonable leverage. Effective cash generation from operations is offset by volatility in free cash flow.

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: Positive
• Last Price: 8.27
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MOMO, the sentiment is Positive. The current price of 8.27 is above the 20-day moving average (MA) of 6.76, above the 50-day MA of 6.13, and above the 200-day MA of 6.56, indicating a bullish trend. The MACD of 0.59 indicates Negative momentum. The RSI at 84.84 is Negative, neither overbought nor oversold. The STOCH value of 94.97 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for MOMO.

Hello Group Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TME	76 Outperform	$27.58B	21.51	14.37%	0.98%	4.59%	83.27%
WB	73 Outperform	$2.35B	7.06	10.79%	8.59%	0.83%	22.06%
MOMO	73 Outperform	$1.33B	7.77	12.39%	―	-11.02%	-5.17%
YELP	71 Outperform	$2.26B	17.03	19.74%	―	5.93%	29.17%
Sector *	61 Neutral	$14.56B	5.82	-4.02%	6.41%	2.72%	-31.67%
NBIS	58 Neutral	$11.22B	189.78	-10.51%	―	-97.73%	-217.89%
JOYY	55 Neutral	$2.54B	―	-2.48%	7.55%	-1.33%	-148.56%