Momo (MOMO) Q3 Earnings: What To Expect On Tuesday

in EARNINGS/INVESTING IDEAS by

Momo Inc. (NASDAQGS:MOMO) is scheduled to report Q3 earnings results on November 26, 2019 at 8:00 AM EST. You can find more information about the conference call here.

The company is expected to report earnings of $0.61/share on revenue of $606.6 million. The consensus earnings per share (EPS) of $0.61/share is based on a poll of 9 analysts and represents a growth of 14.5% over the same quarter last year when the company reported earnings of $0.53/share.

The revenue forecast of $606.6 million based on a poll of 11 analysts implies a year-over-year (YoY) growth of 13.2%. Last year the company reported $536 million in revenue for the quarter.

Expected to report EPS growth of $0.08/share for Q3, 2019
Metric Expected Prior Year YoY Change
Revenue $606.55 $535.97 13.2%
EPS $0.61 $0.53 14.5%

Earnings Call Trends

Management has a perfect record over the last 8 tracked quarters of exceeding earnings guidance. What are your expectations from Momo for earnings this quarter? Let us know in the comments!

Analyst Expected vs Reported EPS
Quarter Expected Reported Surprise Result
Q2, 2019 $0.73 $0.78 7.7% Beat
Q1, 2019 $0.54 $0.62 14.2% Beat
Q4, 2018 $0.52 $0.60 15.8% Beat
Q3, 2018 $0.52 $0.53 1.4% Beat
Q2, 2018 $0.64 $0.66 3.6% Beat
Q1, 2018 $0.51 $0.69 35.8% Beat
Q4, 2017 $0.46 $0.53 14.7% Beat
Q3, 2017 $0.38 $0.45 18.4% Beat

One question we always consider here at the Bankers’ Tribune is how important are earnings reports to Momo’s stock price performance? It’s more important for some companies than for others.

In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report. After the last earnings report for the period ending June 30, 2019, the stock price reacted by increasing by 6.7%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
2019-08-27 $32.73 $34.93 6.7% Increase
2019-05-28 $26.02 $28.25 8.6% Increase
2019-03-12 $32.55 $37.79 16.1% Increase
2018-12-06 $31.69 $24.57 -22.5% Decline

Fundamentals And Technical Analysis

Momo is currently trading at $38.40/share, up 3.4% for the day. The company is trading at approximately 92.5% of its 52-week high of $41.50/share. The company’s stock price is up 9.9% since the last earnings report and down -0.9% over the previous week. The company’s 14 Day Relative Price Index (RSI) of 55.38 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.

The current share price implies a price-to-earnings (P/E) multiple of 24.3x and a forward P/E multiple of 12.8x. Momo’s current share price also implies a price-to-book (P/B) multiple of 4.7x. The following table summarizes some other key fundamental ratios:

Data as of November 25, 2019
Metric Value
Last Fiscal Period FY2019.Q2
Period End Date June 30, 2019
Stock Price (Current) $38.40
P/E Ratio 24.3x
P/E Ratio (Fwd) 12.8x
PEG Ratio 0.5
Total Debt to Capital (%) 8.5%
Levered Free Cash Flow $3.861 billion
Enterprise Value / EBITDA 15.1x

Source: Finbox

Company Profile: Momo Inc.

Momo Inc. is a mid-cap stock with a market capitalization of $7.707 billion and a total enterprise value of $6.626 billion. The company operates in the Communication Services sector and Interactive Media & Services industry.

Momo Inc. operates a mobile-based social and entertainment platform in the People’s Republic of China. The company operates Momo platform that includes its Momo mobile application and various related features, functionalities, tools, and services to users, customers, and platform partners. It offers Momo mobile application that enables users to establish and expand their social relationships based on locations; interests; and recreational activities, including live talent shows, short videos, social games, and other video- and audio-based interactive experiences.

The company also operates Tantan, a social and dating app to help its users to find and establish romantic connections, as well as to meet interesting people primarily for young mobile Internet users.

The company was formerly known as Momo Technology Company Limited and changed its name to Momo Inc. in July 2014. Momo Inc. was founded in 2011 and is headquartered in Beijing, the People’s Republic of China.

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