Momo (NASDAQ:MOMO) has seen its stock price plummet following the release of its Q3 financial results, despite meeting quarterly expectations.
The price fell by 17% and bottomed out at $26.27 when trading opened on Thursday morning. At the time of writing it sits at $27.05 with a market cap just shy of $5.6 billion.
The results from Q3 showed that net revenue had increased by 51% to $536 million, and net income had grown by almost 8% to $85.2million.
However, an analyst for The Motley Fool attributed the stock decline to the fact that the Q4 outlook doesn’t meet expectations.
Momo is reporting revenue from the fourth quarter could be in the region of $531 million to $545 million. Experts were anticipating that it would be over $555 million.
The company also saw a decline in cash flow last quarter. This was largely due to a new reality TV show Momo is sponsoring and hasn’t yet collected the revenue from.
In a statement, CEO Yan Tang announced that his team is working to “build up longer term growth drivers as we start to look beyond 2018 into next year.”
Prior to the results being released, The Motley Fool did suggest that Momo was a smarter investment than Match Group. This was because the Chinese company had become renowned for exceeding Wall Street projections.
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