Yalla Group (YALA) AI Stock Analysis

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Yalla Group

(NYSE:YALA)

79Outperform

Yalla Group is well-positioned with strong financial metrics and positive earnings sentiment, showing significant revenue and user growth. The technical analysis indicates a bullish trend, though caution is advised due to overbought signals. The stock is undervalued with growth potential, supported by strategic AI initiatives. Monitoring cash flow remains crucial for maintaining liquidity.

Yalla Group (YALA) vs. S&P 500 (SPY)

Market Cap

$1.23B

Dividend YieldN/A

Average Volume (3M)1.15M

Price to Earnings (P/E)10.5

Beta (1Y)1.15

Revenue Growth6.52%

EPS Growth14.89%

CountryUS

Employees815

SectorTechnology

Sector Strength62

IndustrySoftware - Application

Share Statistics

EPS (TTM)0.74

Shares Outstanding132,801,830

10 Day Avg. Volume1,837,194

30 Day Avg. Volume1,146,675

Financial Highlights & Ratios

PEG Ratio0.70

Price to Book (P/B)N/A

Price to Sales (P/S)2.56

Price to Cash Flow (P/CF)N/A

P/FCF Ratio0.00

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price TargetN/A

Price Target UpsideN/A

Rating ConsensusN/A

Number of Analyst Covering0

Yalla Group Business Overview & Revenue Model

Company DescriptionYalla Group Limited operates a voice-centric social networking and entertainment platform under the Yalla name primarily in the Middle East and North Africa region. Its platform offers group chatting and games services; and sells virtual items, as well as provides upgrade services. The company was formerly known as FYXTech Corporation. Yalla Group Limited was founded in 2016 and is headquartered in Dubai, the United Arab Emirates.

How the Company Makes MoneyYalla Group generates revenue primarily through in-app purchases and, to a lesser extent, from advertisements. The company monetizes its platforms by offering virtual items and enhancements that users can purchase to enrich their social interactions and gaming experiences. These virtual goods include gifts, stickers, and other interactive elements that enhance user engagement and satisfaction. Additionally, Yalla Group benefits from its premium membership offerings, which provide users with exclusive features and privileges. The company's revenue model is predominantly driven by user spending on virtual items, supported by a growing user base and strong engagement metrics.

Yalla Group Financial Statement Overview

Summary

Yalla Group has demonstrated strong financial performance with high revenue growth, improved net profit margins, and robust cash flow generation. The balance sheet is solid with low leverage, although a slight increase in liabilities needs monitoring.

Income Statement

Very Positive

Yalla Group shows strong revenue growth with a consistent increase from 2019 to 2023. The gross profit margin has remained high, indicating effective cost management. The net profit margin has improved significantly from 2.38% in 2020 to 36.79% in 2023, reflecting enhanced profitability. EBIT and EBITDA margins are also strong, suggesting efficient operations.

Balance Sheet

Very Positive

The company's balance sheet is very solid with a low debt-to-equity ratio, indicating low leverage. The equity ratio is robust, suggesting a strong capital structure. Return on equity has improved significantly, reflecting efficient use of equity to generate profits. However, the increase in liabilities from 2022 to 2023 should be monitored.

Cash Flow

Very Positive

Operating cash flow has consistently increased, indicating strong cash generation capability. Free cash flow has shown significant growth, enhancing financial flexibility. The operating cash flow to net income ratio is favorable, indicating effective cash conversion. The free cash flow to net income ratio shows a strong conversion of profits into cash.

TTM	Dec 2023	Dec 2022	Dec 2021	Dec 2020	Dec 2019
Breakdown
Income Statement		Total Revenue
326.04M	318.88M	303.60M	273.13M	134.93M	63.46M
	Gross Profit
210.10M	204.35M	189.80M	177.99M	73.66M	42.91M
	EBIT
114.46M	96.35M	78.70M	83.03M	3.76M	28.94M
	EBITDA
115.04M	98.37M	82.77M	83.88M	4.34M	29.53M
	Net Income Common Stockholders
130.65M	117.34M	79.76M	82.60M	3.21M	28.92M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
18.82M	535.27M	453.05M	354.39M	237.65M	49.53M
	Total Assets
0.00	638.95M	506.34M	380.81M	254.62M	54.12M
	Total Debt
0.00	2.10M	1.60M	668.33K	0.00	0.00
	Net Debt
18.82M	-309.78M	-405.65M	-350.82M	-236.88M	-45.30M
	Total Liabilities
0.00	76.29M	66.47M	44.93M	21.08M	8.31M
	Stockholders Equity
16.84M	567.69M	440.59M	335.89M	233.53M	45.80M
Cash Flow		Free Cash Flow
0.00	137.67M	103.22M	142.75M	63.76M	30.85M
	Operating Cash Flow
0.00	139.32M	119.55M	144.24M	64.79M	31.28M
	Investing Cash Flow
0.00	-226.12M	-62.57M	-5.36M	2.48M	-2.83M
	Financing Cash Flow
0.00	-7.55M	371.00K	-24.56M	123.77M	-200.00K

Yalla Group Technical Analysis

Technical Analysis Sentiment

Positive

Last Price7.76

Price Trends

50DMA

5.08

Positive

100DMA

4.61

Positive

200DMA

4.41

Positive

Market Momentum

MACD

0.68

Negative

RSI

82.86

Negative

STOCH

91.70

Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For YALA, the sentiment is Positive. The current price of 7.76 is above the 20-day moving average (MA) of 5.95, above the 50-day MA of 5.08, and above the 200-day MA of 4.41, indicating a bullish trend. The MACD of 0.68 indicates Negative momentum. The RSI at 82.86 is Negative, neither overbought nor oversold. The STOCH value of 91.70 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for YALA.

Yalla Group Risk Analysis

Yalla Group disclosed 66 risk factors in its most recent earnings report. Yalla 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

Yalla Group Peers Comparison

Overall Rating

UnderperformOutperform

Sector (59)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
YALA	79 Outperform	$1.23B	10.48	21.33%	―	6.52%	14.89%
OPFI	73 Outperform	$800.97M	48.26	33.59%	―	2.71%	―
VTEX	71 Outperform	$896.21M	75.69	4.84%	―	12.50%	―
DSP	66 Neutral	$891.08M	415.29	3.87%	―	29.74%	―
BMBL	61 Neutral	$471.79M	―	-44.89%	―	1.88%	-11430.00%
Sector *	59 Neutral	$10.72B	10.22	-6.67%	3.02%	7.42%	-11.38%
BLND	45 Neutral	$859.48M	―	-93.00%	―	3.30%	68.45%

* Technology Sector Average

Performance Comparison

YALA

Yalla Group

7.76

3.01

63.37%

OPFI

OppFi

9.27

6.54

239.56%

DSP

Viant Technology

14.12

5.67

67.10%

BMBL

Bumble

4.47

-5.89

-56.85%

BLND

Blend Labs

3.31

1.06

47.11%

VTEX

5.36

-2.05

-27.67%

Yalla Group Earnings Call Summary

Earnings Call Date: Mar 10, 2025 | % Change Since: 93.03% | Next Earnings Date: May 19, 2025

Earnings Call Sentiment Positive

Yalla Group's earnings call highlighted strong revenue growth, user base expansion, and significant advancements in AI integration, all contributing to a positive outlook. While there were increases in technology and development expenses and income tax, these were outweighed by the overall positive performance and strategic developments.

Highlights

Record Revenue and Growth

Yalla Group's revenue rose to US$91 million in Q4 2024, reaching a new record high for the second consecutive quarter. Annual revenue reached US$340 million, demonstrating a 26% year-over-year increase in operating profitability for the full year.

User Base Expansion

As of December 31, 2024, monthly active users (MAU) increased by 14.4% year-over-year to 41.4 million, and paying users increased by 3.2% year-over-year to 12.3 million.

AI Integration and Innovation

Yalla Group has strengthened its AI capabilities, enhancing product offerings and operational efficiency, which significantly boosted user engagement and profitability.

Awards and Recognition

Yalla Group received the PowerHouse Partnership Award and a GOLD Stevie Award, recognizing its innovative contributions to the MENA digital ecosystem.

Lowlights

Increased Technology and Product Development Expenses

Technology and product development expenses increased by 69.6% year-over-year to US$9.2 million in Q4 2024, primarily due to increased headcount for new business development.

Higher Income Tax Expense

Income tax expense increased significantly to US$3.35 million in Q4 2024, compared to US$0.54 million in the same period in 2023.

Company Guidance

During Yalla Group Limited's fourth quarter and full-year 2024 earnings call, the company reported significant financial metrics, highlighting a 12.2% year-over-year increase in fourth-quarter revenues to $90.8 million and a full-year revenue total of $339.7 million. The company's operating income rose by 29.4% year-over-year to $30.1 million in Q4, contributing to a full-year operating income of $121.4 million, marking a 26% increase. Net income for the full year increased by 18.7% to $134.2 million. The company also saw a 14.4% year-over-year rise in monthly active users (MAU) to 41.4 million and a 3.2% increase in paying users to 12.3 million, with an average revenue per paying user (ARPPU) growth of 10.2%. Looking forward, Yalla Group expects Q1 2025 revenues to range between $75 million and $82 million, focusing on product innovation and efficiency improvements to sustain growth and profitability amidst MENA's expanding digital economy.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

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.