Momo Inc (ADR) (NASDAQ:MOMO) Continues On Its Downtrend

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Momo Inc (ADR) (NASDAQ:MOMO), owner of Momo, the popular Chinese dating app, fell sharply Monday, apparently on technical considerations following the Trump Presidential victory.

The ADR closed Monday at $20.11, down 7.92%, on volume of 4.42 million.

Technically, the ADR charted a Bearish Engulfing candlestick pattern on November 8, a pattern that warns of a fall in price. That script played out accordingly, and the ADR has lost 13.5% since that day.

On the weekly chart, the ADR has set up a bearish Three Black Crows pattern, which too is an indicator of worse to come.

It may be noted that $20 is a significant support/resistance line, and if that is broken today there could a quick and dirty skid to $16.70, the next line of support.

Momo Inc (ADR) (NASDAQ:MOMO) on analysts’ radars

The ADR has been viewed favorably by the analysts over the past couple of months, however.

On September 6, Morgan Stanley upgraded the ADR from Underweight to Equal Weight. About a month later Morgan Stanley revised this rating upwards to Overweight.

On September 14, Credit Suisse initiated coverage with an Outperform rating.

“We like YY due to its proven track record and recurring cash flow from PC live streaming, with optionality from mobile product evolution and adequate margin of safety on valuation,” Credit Suisse analysts said. “We also like Momo as the best play in mobile live streaming. Momo’s new video products will likely support user growth resumption and contribute to meaningful revenue upside.”

HSBC Securities initiated coverage on October 31 with a Buy rating, while T.H. Capital initiated coverage with a Buy rating and a price target of $28.

Momo Inc (ADR) (NASDAQ:MOMO) tops third quarter estimates

Momo declared third quarter results last week. It reported EPS of $0.24 which beat estimates by $0.10, and revenue of $157.05 million that beat by $26.55 million and was up 319% year on year.

The live broadcasting business, which the company calls its “number-one revenue engine,” clocked revenues of $108.6 million, up 88% sequentially.

“The success that we have accomplished in the live broadcasting space positions us well to keep pushing deeper into other territories in the video, social, and the broader entertainment industries,” said Mr. Tang Yan, Co-Founder, Chairman and Chief Executive Officer, on a conference call. “By deeply integrating video elements into every major social scenario on Momo and providing more entertaining content to our users, we could substantially broaden the core use cases on Momo and raise the ceilings of our total addressable audience.”

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