momo.com Inc. Just Missed Earnings - But Analysts Have Updated Their Models

momo.com Inc. (TWSE:8454) missed earnings with its latest second-quarter results, disappointing overly-optimistic forecasters. momo.com missed earnings this time around, with NT$27b revenue coming in 7.3% below what the analysts had modelled. Statutory earnings per share (EPS) of NT$3.20 also fell short of expectations by 13%. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

Check out our latest analysis for momo.com

Following the latest results, momo.com's six analysts are now forecasting revenues of NT$114.4b in 2024. This would be a reasonable 2.6% improvement in revenue compared to the last 12 months. Statutory per share are forecast to be NT$14.83, approximately in line with the last 12 months. In the lead-up to this report, the analysts had been modelling revenues of NT$119.5b and earnings per share (EPS) of NT$15.97 in 2024. The analysts are less bullish than they were before these results, given the reduced revenue forecasts and the small dip in earnings per share expectations.

Despite the cuts to forecast earnings, there was no real change to the NT$452 price target, showing that the analysts don't think the changes have a meaningful impact on its intrinsic value. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on momo.com, with the most bullish analyst valuing it at NT$513 and the most bearish at NT$340 per share. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's pretty clear that there is an expectation that momo.com's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 5.3% growth on an annualised basis. This is compared to a historical growth rate of 18% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 8.4% per year. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than momo.com.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for momo.com. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. The consensus price target held steady at NT$452, with the latest estimates not enough to have an impact on their price targets.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple momo.com analysts - going out to 2026, and you can see them free on our platform here.

Don't forget that there may still be risks. For instance, we've identified 1 warning sign for momo.com that you should be aware of.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.