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At US$051.09, Is It Time To Buy Momo Inc (NASDAQ:MOMO)?

Let’s talk about the popular Momo Inc (NASDAQ:MOMO). The company’s shares led the NasdaqGS gainers with a relatively large price hike in the past couple of weeks. As a large-cap stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. But what if there is still an opportunity to buy? Today I will analyse the most recent data on Momo’s outlook and valuation to see if the opportunity still exists. See our latest analysis for Momo

What is Momo worth?

Momo appears to be overvalued by 21.6% at the moment, based on my discounted cash flow valuation. The stock is currently priced at US$51.09 on the market compared to my intrinsic value of $42.01. This means that the opportunity to buy Momo at a good price has disappeared! But, is there another opportunity to buy low in the future? Given that Momo’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us another chance to buy in the future. This is based on its high beta, which is a good indicator for share price volatility.

Can we expect growth from Momo?

NasdaqGS:MOMO Future Profit June 21st 18
NasdaqGS:MOMO Future Profit June 21st 18

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company’s future expectations. With profit expected to grow by 94.35% over the next couple of years, the future seems bright for Momo. It looks like higher cash flows is on the cards for the stock, which should feed into a higher share valuation.

What this means for you:

Are you a shareholder? MOMO’s optimistic future growth appears to have been factored into the current share price, with shares trading above its fair value. However, this brings up another question – is now the right time to sell? If you believe MOMO should trade below its current price, selling high and buying it back up again when its price falls towards its real value can be profitable. But before you make this decision, take a look at whether its fundamentals have changed.

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Are you a potential investor? If you’ve been keeping an eye on MOMO for a while, now may not be the best time to enter into the stock. The price has surpassed its true value, which means there’s no upside from mispricing. However, the positive outlook is encouraging for MOMO, which means it’s worth diving deeper into other factors in order to take advantage of the next price drop.

Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Momo. You can find everything you need to know about Momo in the latest infographic research report. If you are no longer interested in Momo, you can use our free platform to see my list of over 50 other stocks with a high growth potential.


To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned.