Stock Analysis

Earnings Update: Yalla Group Limited (NYSE:YALA) Just Reported And Analysts Are Trimming Their Forecasts

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Yalla Group Limited (NYSE:YALA) shareholders are probably feeling a little disappointed, since its shares fell 6.3% to US$3.57 in the week after its latest yearly results. Yalla Group reported in line with analyst predictions, delivering revenues of US$304m and statutory earnings per share of US$0.45, suggesting the business is executing well and in line with its plan. 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.

View our latest analysis for Yalla Group

NYSE:YALA Earnings and Revenue Growth March 16th 2023

Taking into account the latest results, the consensus forecast from Yalla Group's twin analysts is for revenues of US$314.0m in 2023, which would reflect a credible 3.4% improvement in sales compared to the last 12 months. Before this earnings report, the analysts had been forecasting revenues of US$332.1m and earnings per share (EPS) of US$0.72 in 2023. So we can see that while the consensus made a small dip in revenue estimates, it no longer provides an earnings per share estimate, suggesting that the market is now more focused on revenue after the latest result.

There's been no real change to the consensus price target of US$5.10, with Yalla Group seemingly executing in line with expectations.

Of course, another way to look at these forecasts is to place them into context against the industry itself. We would highlight that Yalla Group's revenue growth is expected to slow, with the forecast 3.4% annualised growth rate until the end of 2023 being well below the historical 47% p.a. growth over the last three years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 9.0% 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 Yalla Group.

The Bottom Line

The most important thing to take away is that the analysts downgraded their revenue estimates for next year. On the negative side, they also downgraded their revenue estimates, and forecasts imply revenues 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.

At least one of Yalla Group's twin analysts has provided estimates out to 2024, which can be seen for free on our platform here.

We don't want to rain on the parade too much, but we did also find 2 warning signs for Yalla Group that you need to be mindful of.

What are the risks and opportunities for Yalla Group?

Yalla Group Limited operates a voice-centric social networking and entertainment platform under the Yalla name primarily in the Middle East and North Africa region.

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  • Trading at 54.2% below our estimate of its fair value

  • Earnings are forecast to grow 14.32% per year


  • Shareholders have been diluted in the past year

  • Volatile share price over the past 3 months

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