Hello Group (MOMO) AI Stock Analysis

• Market Cap: $1.12B
• Dividend Yield: N/A
• Average Volume (3M): 955.11K
• Price to Earnings (P/E): 10.7
• Beta (1Y): 0.50
• Revenue Growth: -7.33%
• EPS Growth: -34.16%
• Country: US
• Employees: 1,390
• Sector: Communication Services
• Sector Strength: 97
• Industry: Internet Content & Information
• EPS (TTM): -0.12
• Shares Outstanding: 120,487,236
• 10 Day Avg. Volume: 1,047,600
• 30 Day Avg. Volume: 955,109
• PEG Ratio: -0.22
• Price to Book (P/B): 0.92
• Price to Sales (P/S): 1.00
• P/FCF Ratio: 7.77
• Enterprise Value/Market Cap: 0.37
• Enterprise Value/Revenue: 0.04
• Enterprise Value/Gross Profit: 0.11
• Enterprise Value/Ebitda: 0.25
• 1Y Price Target: $13.00
• Price Target Upside: 84.66% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 51 Neutral
• Price Target: $7.00 ▼(-0.57% Downside)

Hello Group's overall stock score reflects significant challenges in financial performance and technical analysis. Declining revenue and profitability, coupled with bearish technical indicators, weigh heavily on the score. While valuation appears reasonable, and there is potential in overseas expansion and AI integration, these factors are currently overshadowed by domestic market struggles and tax implications.

Positive Factors

Overseas Revenue Growth

Strong overseas revenue growth signifies successful market expansion and diversification, reducing reliance on domestic markets and enhancing long-term revenue stability.

Strong Balance Sheet

A strong balance sheet with low leverage enhances financial resilience, providing the company with the flexibility to invest in growth opportunities and weather economic downturns.

Operational Efficiency

Healthy EBITDA and EBIT margins reflect efficient cost management and operational effectiveness, supporting sustainable profitability and competitive positioning.

Negative Factors

Domestic Revenue Decline

Declining domestic revenue indicates challenges in the core market, potentially impacting overall growth and necessitating strategic adjustments to regain market share.

Decrease in Paying Users

A decrease in paying users can lead to reduced revenue from core services, highlighting the need for improved user engagement and retention strategies.

Gross Margin Decline

A declining gross margin suggests increased cost pressures or pricing challenges, which could affect profitability if not addressed through cost control or pricing strategies.

Hello Group Business Overview & Revenue Model

Company Description

Hello Group Inc. (formerly known as Momo Inc.) is a leading Chinese technology company that primarily operates in the social networking and online dating sectors. Founded in 2011, the company is best known for its mobile application, Momo, which allows users to connect with others through various social features such as chat, live streaming, and sharing multimedia content. In addition to Momo, Hello Group also operates Tantan, a popular dating app, further expanding its portfolio in the social and dating market.

How the Company Makes Money

Hello Group generates revenue through several key streams. The primary source of income is from value-added services, which include premium subscriptions, virtual gifts, and in-app purchases that enhance user experience on the Momo and Tantan platforms. Advertising is another significant revenue stream, where the company sells ad space to businesses looking to reach its large user base. Additionally, Hello Group benefits from partnerships with various brands and organizations, allowing for promotional campaigns and collaborations that drive further revenue. The integration of live streaming and e-commerce features also provides new monetization opportunities, particularly as users engage in virtual gifting during live broadcasts.

Hello Group Financial Statement Overview

Summary

Hello Group faces challenges with declining revenue and profitability, as reflected in the income statement. The balance sheet remains stable with low leverage, but reduced return on equity indicates decreased shareholder returns. Cash flow analysis shows potential liquidity concerns, although cash generation relative to net income is strong. The company needs to address revenue growth and profitability to improve its financial health.

Income Statement

The income statement shows declining revenue with a negative growth rate of -67.5% TTM, indicating significant challenges in maintaining sales. Gross profit margin is moderate at 37.57%, but net profit margin has decreased to 8.17% TTM, reflecting reduced profitability. EBIT and EBITDA margins are stable but lower than previous years, suggesting operational efficiency issues.

Balance Sheet

The balance sheet is relatively stable with a low debt-to-equity ratio of 0.24 TTM, indicating manageable leverage. However, return on equity has decreased to 7.66% TTM, showing reduced profitability for shareholders. The equity ratio remains healthy, suggesting a strong capital structure.

Cash Flow

Cash flow analysis reveals a decline in free cash flow growth at -4.25% TTM, indicating potential liquidity issues. The operating cash flow to net income ratio is low at 0.26, suggesting challenges in converting income into cash. However, the free cash flow to net income ratio is strong at 92.39%, indicating efficient cash generation relative to net income.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	10.45B	10.56B	12.00B	12.70B	14.58B	15.02B
Gross Profit	3.93B	4.12B	4.98B	5.28B	6.19B	7.05B
EBITDA	1.67B	1.59B	2.79B	1.74B	2.27B	2.90B
Net Income	854.39M	1.04B	1.96B	1.48B	-2.92B	2.10B
Balance Sheet
Total Assets	16.52B	18.38B	16.23B	15.83B	18.11B	23.22B
Cash, Cash Equivalents and Short-Term Investments	6.33B	6.15B	6.89B	10.62B	8.43B	10.93B
Total Debt	2.67B	4.58B	2.29B	2.77B	4.83B	4.93B
Total Liabilities	5.52B	6.95B	4.24B	4.90B	7.53B	8.39B
Stockholders Equity	10.99B	11.43B	11.80B	10.78B	10.45B	14.64B
Cash Flow
Free Cash Flow	1.16B	1.35B	1.70B	1.15B	1.46B	2.96B
Operating Cash Flow	1.25B	1.64B	2.28B	1.23B	1.56B	3.08B
Investing Cash Flow	-490.29M	-558.89M	2.41B	1.72B	2.55B	-748.47M
Financing Cash Flow	-2.23B	236.20M	-1.70B	-3.43B	-1.79B	-1.50B

Hello Group Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 7.04
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MOMO, the sentiment is Neutral. The current price of 7.04 is above the 20-day moving average (MA) of 6.89, below the 50-day MA of 7.08, and below the 200-day MA of 7.20, indicating a neutral trend. The MACD of -0.01 indicates Negative momentum. The RSI at 53.83 is Neutral, neither overbought nor oversold. The STOCH value of 52.67 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for MOMO.

Hello Group Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TME	71 Outperform	$26.62B	18.86	14.47%	0.98%	13.86%	80.97%
Sector *	60 Neutral	$48.67B	4.58	-11.27%	4.14%	2.83%	-41.78%
JOYY	60 Neutral	$3.29B	―	-2.29%	4.41%	-7.60%	-160.75%
WB	60 Neutral	$2.47B	5.78	12.46%	8.20%	-1.29%	22.48%
Z	58 Neutral	$17.84B	―	-0.66%	―	15.17%	75.90%
MOMO	51 Neutral	$1.12B	10.71	7.65%	―	-7.33%	-34.16%
NBIS	50 Neutral	$22.89B	100.25	3.45%	―	-87.55%	336.73%

Hello Group Corporate Events

Hello Group Reports Q2 2025 Financial Results Amid Tax Changes

Hello Group Inc. reported its unaudited financial results for the second quarter of 2025, revealing a 2.6% year-over-year decline in net revenues to RMB2,620.4 million. Despite this, the company saw a substantial 72.7% increase in overseas revenues, highlighting its strategic focus on international expansion. The quarter was marked by a net loss attributable to the company of RMB140.2 million, a significant shift from the net income of RMB397.8 million in the same period of 2024. This loss was exacerbated by an additional withholding tax accrual due to a change in tax rates imposed by Chinese authorities. The company’s domestic operations faced challenges, with a decline in monthly active users and paying users on its apps, while its overseas business continued to grow, driven by the success of established and new apps.