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Is It Time to Swipe Right on the «Tinder of China»?

19.11.2022 BlackChristianPeopleMeet visitors  No comments

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China’s online dating leader still faces daunting challenges.

Momo (MOMO 1.79% ) , the Chinese tech company that owns two of the country’s leading dating apps, recently posted its first-quarter earnings. Its revenue dipped 3.4% year over year to 3.47 billion yuan ($529.7 million), missing estimates by $3.1 million. Its adjusted net income declined 14% to 634 million yuan ($96.7 million), or $0.44 per ADS, which still beat expectations by $0.11.

Momo expects its revenue to fall 4.3% to 6.9% in the second quarter. That fell short of analysts’ expectations for a 4% drop, and management didn’t provide any bottom-line guidance.

Momo’s growth rates look weak, but its stock still advanced after the report, presumably due to its profit beat. The low forward P/E ratio of 7.7 could also be setting a floor under the stock, especially after it has shed 70% of its value over the past three years.

But is Momo stock actually worth buying as a potential turnaround play? Or should investors still swipe left on the so-called «Tinder of China»?

How Momo lost its momentum

When Momo went public in late 2014, it generated more than 60% of its revenue from subscription fees on its namesake app. The Momo app enabled users to find friends based on their profiles and locations, and paid users could unlock more features and perks. It wasn’t explicitly marketed as a dating app, but ...

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