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Category: Momo Inc (MOMO)
Date: 26 March 2021 Stock price of Momo Inc: $13.95 Market Capital of Momo Inc: $2.9 billion We take a a look at the 4th quarter 2020 earnings report of Momo Inc (MOMO) a leading player in China's online social and entertainment space. Through Momo, Tantan and other properties within our product portfolio, we enable users to discover new relationships, expand their social connections and build meaningful interactions
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Declaration of a special cash dividend Momo's board of directors has declared a special cash dividend in the amount of US$0.64 per ADS, or US$0.32 per ordinary share. The cash dividend will be paid on April 30, 2021 to shareholders of record at the close of business on April 13, 2021"
More About Momo Inc
We are a leading player in China's online social and entertainment space. Through Momo, Tantan and other properties within our product portfolio, we enable users to discover new relationships, expand their social connections and build meaningful interactions. Momo is a mobile application that connects people and facilitates interactions based on location, interests and a variety of recreational activities including live talent shows, short videos, social games as well as other video- and audio-based interactive experiences, such as live chats and mobile karaoke experience. Tantan, which was added into our family of applications through acquisition in May 2018, is a leading social and dating application for the younger generation. Tantan is designed to help its users find and establish romantic connections as well as meet interesting people.
Overview of Momo Inc 4th quarter and full fiscal 2020 earnings
Fourth Quarter of 2020 Highlights
Full Year 2020 Highlights
- Net revenues decreased by 19.0% year over year to RMB3,795.2 million (US$581.6 million*) in the fourth quarter of 2020.
- Net income attributable to Momo Inc. decreased to RMB651.5 million (US$99.8 million) in the fourth quarter of 2020 from RMB1,055.9 million in the same period of 2019.
- Non-GAAP net income attributable to Momo Inc. (note 1) decreased to RMB836.4 million (US$128.2 million) in the fourth quarter of 2020, from RMB1,252.5 million in the same period of 2019.
- Diluted net income per American Depositary Share ("ADS") was RMB2.98 (US$0.46) in the fourth quarter of 2020, compared to RMB4.74 in the same period of 2019.
- Non-GAAP diluted net income per ADS (note 1) was RMB3.80 (US$0.58) in the fourth quarter of 2020, compared to RMB5.61 in the same period of 2019. Monthly Active Users ("MAU") on Momo application were 113.8 million in December 2020, compared to 114.5 million in December 2019.
- Total paying users of our live video service and value-added service, without double counting the overlap and including 3.8 million paying users of Tantan Limited ("Tantan"), were 12.8 million for the fourth quarter of 2020, compared to 13.8 million for the fourth quarter of 2019, which included 4.5 million paying users of Tantan.
Full Year 2020 Highlights
- Net revenues decreased by 11.7% year over year to RMB15,024.2 million (US$2,302.6 million) for the full year of 2020.
- Net income attributable to Momo Inc. was RMB2,103.5 million (US$322.4 million) for the full year of 2020, compared with RMB2,970.9 million during the same period of 2019.
- Non-GAAP net income attributable to Momo Inc. (note 1) was RMB2,896.2 million (US$443.9 million) for the full year of 2020, compared with RMB4,493.3 million during the same period of 2019.
- Diluted net income per ADS was RMB9.65 (US$1.48) for the full year of 2020, compared with RMB13.52 during the same period of 2019.
- Non-GAAP diluted net income per ADS (note 1) was RMB13.16 (US$2.02) for the full year of 2020, compared with RMB20.26 during the same period of 2019.
Momo Inc (MOMO) management commentary on 4th quarter 2020 earnings
BEIJING, March 25, 2021 /PRNewswire/ -- Momo Inc. (NASDAQ: MOMO) ("Momo" or the "Company"), a leading mobile social networking platform in China, today announced its unaudited financial results for the fourth quarter and the full year ended December 31, 2020.
Cash and cash flow
As of December 31, 2020, Momo's cash, cash equivalents, short-term deposits, long-term deposits and restricted cash totaled RMB16,482.3 million (US$2,526.0 million), compared to RMB15,225.3 million as of December 31, 2019. Net cash provided by operating activities in the fourth quarter of 2020 was RMB1,039.1 million (US$159.2 million), compared to RMB1,675.1 million in the fourth quarter of 2019.
Net income per ADS
Diluted net income per ADS was RMB9.65 (US$1.48) during the full year of 2020, compared to RMB13.52 in the same period of 2019. Non-GAAP diluted net income per ADS (note 1) was RMB13.16 (US$2.02) during the full year of 2020, compared to RMB20.26 in the same period of 2019. Net cash provided by operating activities was RMB3,080.9 million (US$472.2 million) during the full year of 2020, compared to RMB5,448.9 million in the same period of 2019.
Recent Developments
Declaration of a special cash dividend Momo's board of directors has declared a special cash dividend in the amount of US$0.64 per ADS, or US$0.32 per ordinary share. The cash dividend will be paid on April 30, 2021 to shareholders of record at the close of business on April 13, 2021. The ex-dividend date will be April 12, 2021. The aggregate amount of cash dividends to be paid is approximately US$132 million, which will be funded by surplus cash on the Company's balance sheet. Execution of share repurchase program
On September 3, 2020, Momo's board of directors authorized a share repurchase program under which the Company may repurchase up to US$300 million of its shares over the next 12 months. As of March 24, 2021, the Company has repurchased approximately 3.61 million ADSs for approximately US$49.2 million on the open market under this program, at an average purchase price of US$13.63 per ADS.
Resignation of Chief Technology Officer Mr. Chunlai Wang will resign from the Company's Chief Technology Officer position for personal reasons, effective April 30, 2021, and he will continue to serve as an advisor to the Company. The Company is grateful to Mr. Chunlai Wang for his valuable contributions over the past nine years.
Business Outlook
For the first quarter of 2021, the Company expects total net revenues to be between RMB3.36 billion to RMB3.46 billion, representing a decrease of 6.5% to 3.7% year-over-year. This forecast considers the potential impact of the COVID-19 pandemic and reflects the Company's current and preliminary views on the market and operational conditions, which are subject to change, particularly with respect to the potential lasting impact of COVID-19 on the economy in China.
Cash and cash flow
As of December 31, 2020, Momo's cash, cash equivalents, short-term deposits, long-term deposits and restricted cash totaled RMB16,482.3 million (US$2,526.0 million), compared to RMB15,225.3 million as of December 31, 2019. Net cash provided by operating activities in the fourth quarter of 2020 was RMB1,039.1 million (US$159.2 million), compared to RMB1,675.1 million in the fourth quarter of 2019.
Net income per ADS
Diluted net income per ADS was RMB9.65 (US$1.48) during the full year of 2020, compared to RMB13.52 in the same period of 2019. Non-GAAP diluted net income per ADS (note 1) was RMB13.16 (US$2.02) during the full year of 2020, compared to RMB20.26 in the same period of 2019. Net cash provided by operating activities was RMB3,080.9 million (US$472.2 million) during the full year of 2020, compared to RMB5,448.9 million in the same period of 2019.
Recent Developments
Declaration of a special cash dividend Momo's board of directors has declared a special cash dividend in the amount of US$0.64 per ADS, or US$0.32 per ordinary share. The cash dividend will be paid on April 30, 2021 to shareholders of record at the close of business on April 13, 2021. The ex-dividend date will be April 12, 2021. The aggregate amount of cash dividends to be paid is approximately US$132 million, which will be funded by surplus cash on the Company's balance sheet. Execution of share repurchase program
On September 3, 2020, Momo's board of directors authorized a share repurchase program under which the Company may repurchase up to US$300 million of its shares over the next 12 months. As of March 24, 2021, the Company has repurchased approximately 3.61 million ADSs for approximately US$49.2 million on the open market under this program, at an average purchase price of US$13.63 per ADS.
Resignation of Chief Technology Officer Mr. Chunlai Wang will resign from the Company's Chief Technology Officer position for personal reasons, effective April 30, 2021, and he will continue to serve as an advisor to the Company. The Company is grateful to Mr. Chunlai Wang for his valuable contributions over the past nine years.
Business Outlook
For the first quarter of 2021, the Company expects total net revenues to be between RMB3.36 billion to RMB3.46 billion, representing a decrease of 6.5% to 3.7% year-over-year. This forecast considers the potential impact of the COVID-19 pandemic and reflects the Company's current and preliminary views on the market and operational conditions, which are subject to change, particularly with respect to the potential lasting impact of COVID-19 on the economy in China.
Momo Inc (MOMO) stock price history over the last 5 years
The image below shows the stock price history of Momo Inc (MOMO) over the last 5 years. And its not been a good time for Momo Inc stockholders with the stock decreasing by -15.6% over the last 5 years. Not exactly the type of returns investors would like to see.
The stock of Momo Inc (MOMO) is trading at closer to its 52 week high than it is to its 52 week low which is a clear indication that the short term sentiment and momentum of UTZ Brands stock is positive at this point in time.
The stock of Momo Inc (MOMO) is trading at closer to its 52 week high than it is to its 52 week low which is a clear indication that the short term sentiment and momentum of UTZ Brands stock is positive at this point in time.
Latest stock valuation of Momo Inc (MOMO)
So what is Momo Inc (MOMO) stock worth based on their 4th quarter 2020 earnings report? Based on their earnings report our valuation model provides a target price (full value price) for Momo Inc (MOMO) at $12.30 a stock
We therefore believe the stock of Momo Inc (MOMO) is undervalued at its current price of $13.95
We usually recommend long term fundamental or value investors look to enter a stock at least 10% below our target price (full value price), which in this case is $12.30 thus a good entry point into Momo Inc (MOMO) would be at $11 or below.
We expect the stock of Momo Inc to kick up from current levels in coming weeks and months to levels closer to our target price (full value price), as their stock is price is undervalued
We therefore believe the stock of Momo Inc (MOMO) is undervalued at its current price of $13.95
We usually recommend long term fundamental or value investors look to enter a stock at least 10% below our target price (full value price), which in this case is $12.30 thus a good entry point into Momo Inc (MOMO) would be at $11 or below.
We expect the stock of Momo Inc to kick up from current levels in coming weeks and months to levels closer to our target price (full value price), as their stock is price is undervalued
Next earnings release of Momo Inc (MOMO)
It is expected that Momo Inc (MOMO) will release their 1st quarter 2021 earnings report in late June 2021
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