Seeking Alpha analyst Dominic Teo has provided an update to his interpretation of Momo’s position in the market, following the company’s 2018 financial report and positive start to 2019.
Teo originally believed Momo stock was undervalued in January, and the price has since grown by approximately 50% to $37.60.
He now concludes that shares are worth holding onto and has set a new target price of $41.19 by the end of the calendar year. However, he admitted it might not be worth purchasing any new stock at this current time.
Several reasons were cited for this outlook, including stable growth on the live-streaming platform and a consistent increase in monthly active users.
There has also been a high growth in Value-Added Services (VAS) such as virtual gifts for streamers. Teo points out, however, that 70% of Momo’s daily active users don’t engage with video content at all – most of the revenue comes from paid memberships on Tantan.
‘See Who Likes Me’ and ‘Super Exposure’ are two premium features that were introduced to Tantan midway through last year. They contributed to 3.1 million users signing up for subscriptions.
In Momo’s most recent conference call, executives explained that they were planning an overseas expansion and looking to take Tantan to markets all across Asia.
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