Hello Group Inc. Just Missed Earnings With A Surprise Loss - Here Are Analysts Latest Forecasts

Shareholders might have noticed that Hello Group Inc. (NASDAQ:MOMO) filed its quarterly result this time last week. The early response was not positive, with shares down 9.8% to US$7.53 in the past week. Revenues came in at CN¥2.6b, in line with estimates, while Hello Group reported a statutory loss of CN¥0.84 per share, well short of prior analyst forecasts for a profit. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

This technology could replace computers: discover the 20 stocks are working to make quantum computing a reality.

Following last week's earnings report, Hello Group's nine analysts are forecasting 2025 revenues to be CN¥10.4b, approximately in line with the last 12 months. Statutory earnings per share are expected to plummet 25% to CN¥4.01 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of CN¥10.5b and earnings per share (EPS) of CN¥6.82 in 2025. The analysts seem to have become more bearish following the latest results. While there were no changes to revenue forecasts, there was a pretty serious reduction to EPS estimates.

View our latest analysis for Hello Group

The consensus price target held steady at US$9.84, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. 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. Currently, the most bullish analyst values Hello Group at US$13.00 per share, while the most bearish prices it at US$7.45. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. One thing that stands out from these estimates is that shrinking revenues are expected to moderate over the period ending 2025 compared to the historical decline of 9.1% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 11% per year. So while a broad number of companies are forecast to grow, unfortunately Hello Group is expected to see its revenue affected worse than other companies in the industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Hello Group. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple Hello Group analysts - going out to 2027, and you can see them free on our platform here.

Before you take the next step you should know about the 2 warning signs for Hello Group that we have uncovered.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.