Momo: Down but Not Out

Momo Inc. (MOMO) has seen a nearly 12% decline in its share price over the past two months, but I’m confident the stock will bounce back from here. Why? The answer is simple—Momo still has a few tricks up its sleeve. In today’s blog, I’ll reveal to you precisely what Momo has going for it right now. Plus, you’ll discover a couple new surprises Momo has coming down the line.

Momo Inc. is a social media company in the People’s Republic of China. The company was founded in 2011 and is headquartered in Beijing. Currently, Momo offers a mobile-based social networking platform, where members can establish new relationships and expand their social circles. Yes, that’s a fancy way to say Momo was founded primarily as a dating app.

But today, the company’s social media platform allows for much more than just dating. The app now allows users to share photos, participate in group chats, join community groups and buy and share virtual gifts.

The company also offers games, which are designed with specific themes, cultural characteristics and features to appeal to various segments of the gamer community. Plus, the company offers paid emoticons and mobile marketing services.

Then, last week, Momo’s vice president He Hongzhen announced the company’s plans to provide live streaming on the app of traditional Chinese performance art, such as opera, which may attract an even wider user-base and revenue.

With this feature, users can watch musicians perform live on Momo and even interact with them. For instance, a user can pay real money to buy a virtual bouquet of flowers for an artist who they want to express their appreciation to. Already this past March, Momo worked with the China National Traditional Orchestra to stream its performances online to a massive 20 million viewers.

But here’s what’s most exciting to me right now.

Even though the app is currently only available in Chinese, an English version is expected to roll out soon for iPhone and Android devices. I know the social media space in the English-speaking world is crowded, but Momo is bringing a great team and product to the market.

With these plans for an English-language app and increased streaming, it’s easy to see why I think Momo’s shares will bounce back from this recent decline.

Momo maintains an A-rating in my Portfolio Grader tool. That’s partly because third-quarter earnings per share estimates average $0.38, which, if achieved, would be a 9% increase on their second-quarter EPS of $0.35. It also represents 58.3% year-over-year EPS growth. Third-quarter sales are forecasted to surge 116.2% year-over-year to $339.51 million.

None of that is news to my Blue Chip Growth members, though. They already have exclusive access to my proprietary Buy Below price, and that means they’re poised to profit when Momo reports third-quarter results in early November.

But if you aren’t ready to join Blue Chip Growth today, I urge you to stay tuned into this blog in the weeks to come. I’ll continue revealing my insights into what the overall market has to offer.


signed: Louis Navellier

Louis Navellier

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