Hello Group (MOMO) AI Stock Analysis

• Market Cap: $966.51M
• Dividend Yield: N/A
• Average Volume (3M): 1.21M
• Price to Earnings (P/E): 7.5
• Beta (1Y): 0.51
• Revenue Growth: -13.37%
• EPS Growth: -44.13%
• Country: US
• Employees: 1,390
• Sector: Communication Services
• Sector Strength: 81
• Industry: Internet Content & Information
• EPS (TTM): 0.78
• Shares Outstanding: 136,143,250
• 10 Day Avg. Volume: 746,511
• 30 Day Avg. Volume: 1,210,411
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.00
• Price to Cash Flow (P/CF): 0.00
• 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: 120.71% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1

Hello Group's overall stock score reflects significant challenges in revenue generation and operational profitability. While the financial performance shows resilience in cash flow and a stable balance sheet, technical indicators point to bearish momentum. The valuation suggests the stock may be undervalued, but the absence of a dividend yield detracts from its appeal. Mixed sentiment from the earnings call, with strategic focus on international growth and profitability, adds a cautious tone to the outlook.

Positive Factors

Financial 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.

Overseas Growth

MOMO’s overseas operations saw strong growth and will remain a key growth driver for FY25 and beyond.

Strategic Investments

The company's investment in new apps like Yaahlan and Amar in the Middle East, along with the ongoing growth of Soulchill, is seen as a key growth driver for future positive revenue.

Negative Factors

Dividend Uncertainty

A special dividend announced earlier missed investor expectations, which adds to the uncertainty regarding the total amount of dividends by year-end.

Streaming Business Pressure

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

Tantan Challenges

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. (NASDAQ: MOMO) is a leading mobile social networking platform in China. The company operates several social networking and entertainment products, with its core offerings being the Momo app and Tantan app. Momo is a location-based social networking app that facilitates social interactions for users, while Tantan is a dating app similar to Tinder, aimed at helping users find romantic partners. Hello Group integrates social networking, live video streaming, and other interactive features to enhance user engagement and connection.

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: 5.89
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

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 5.89 is above the 20-day moving average (MA) of 5.52, below the 50-day MA of 6.22, and below the 200-day MA of 6.53, indicating a neutral trend. The MACD of -0.09 indicates Negative momentum. The RSI at 53.90 is Neutral, neither overbought nor oversold. The STOCH value of 89.48 is Negative, 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	77 Outperform	$20.76B	23.91	10.75%	1.22%	0.63%	34.09%
YELP	75 Outperform	$2.27B	18.39	17.79%	―	5.61%	37.61%
MOMO	63 Neutral	$966.51M	7.52	9.01%	―	-13.37%	-44.13%
WB	61 Neutral	$2.05B	7.18	8.74%	9.58%	-0.29%	-12.84%
Sector *	59 Neutral	$13.76B	7.65	-2.18%	3.85%	2.32%	-36.56%
JOYY	55 Neutral	$2.20B	―	-2.96%	2.19%	-1.33%	-148.56%
NBIS	47 Neutral	$5.98B	189.78	-9.36%	―	-98.74%	-128.03%