(VIANEWS) – Momo (NASDAQ: MOMO) shares have experienced a sharp 19.31% drop over five sessions from EUR9.53 to EUR7.69 at 14:10 EST Thursday afternoon following two consecutive losses, as the NASDAQ also fell by 1.15% to EUR13,712.43. This drop follows three consecutive days of losses on Momo’s part; last close was EUR8.02, which represents 30.5% lower than its 52-week high of EUR11.54.
About Momo
Hello Group Inc. is a mobile-based social and entertainment service provider in China offering Momo, Tantan, and other applications such as livestreaming, value-added services, advertising, mobile games and live streaming. Established in 2011, with headquarters located in Beijing China.
Yearly Analysis
Momo’s stock has experienced significant price volatility since reaching its 52-week high of EUR11.54 last May and its 52-week low of EUR4.09. This indicates a dramatic price change.
Momo expects its sales growth rate to be negative 5.5% this year and 4.4% next year, suggesting revenue will likely decrease while experiencing some increase next year.
Momo currently boasts an EBITDA score of 1.03, meaning their earnings before interest, taxes, depreciation and amortization are positive – an encouraging sign as it indicates profits are being generated while maintaining healthy financial status.
Overall, Momo’s stock seems to be underperforming its 52-week high and sales growth is anticipated to decrease this year; however, its EBITDA margin is positive, which should give investors some hope that further research should be conducted before making investment decisions.
Technical Analysis
Momo’s stock has experienced a dramatic downward trend, trading below both its 50-day and 200-day moving averages and boasting trading volumes 50.83% below their average volume. This further underscores this downward spiral.
Considered in terms of volatility, the stock has experienced relatively stable variations over the last quarter at an average intraday variation of 2.10%; however, in its recent week and month it experienced negative trends averaging -3.35% and -1.31% respectively.
The stochastic oscillator, a popular indicator of overbought and oversold conditions, suggests that Momo’s stock may currently be overbought with an oscillator value greater than 80.
Overall, Momo’s stock seems bearish with values falling below moving averages, low trading volume, and an overbought condition according to stochastic oscillator. We will have to see whether these factors lead to further price drops for Momo or signal a turnaround in the market.
Quarter Analysis
Momo currently exhibits negative sales growth of 5.5% for its current quarter and anticipates seeing it improve to 2.8% during its next.
Momo has seen its revenue decline year-on-year for the twelve trailing months by 10.5% year, reaching 12.37B currently. Investors may take notice as this signal indicates a decreased ability to generate revenues from Momo.
Momo’s financial performance appears to be facing challenges in the short-term, with negative sales growth and declining revenue growth. However, investors looking for a turnaround should note the expected improvement in sales growth for next quarter as it may provide hope that this company can rebound financially. Investors should continue keeping an eye on Momo and assessing any factors which might interfere with its future growth prospects.
Equity Analysis
Momo appears to be fairly valued given its trailing twelve month EPS of EUR1.14 and PE ratio of 6.75. This indicates investors are paying EUR6.75 for every euro of annual earnings – an affordable price given Momo has achieved 15.31% profitability. It should be remembered however, that past performance does not guarantee future outcomes and other factors like market conditions, industry trends and company news should all be taken into consideration prior to making an investment decision.
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