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Bull of the Day: Momo (MOMO)

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When looking for the Bull of the Day I typically try to find a stock that has an interesting combination. Most of the time it’s a Zacks Rank #1 (Strong Buy) stock that’s breaking on through to new highs. That’s fantastic but I really like when I can uncover a gem not too many people are talking about within an area of the market they are very excited about. Today’s stock sits at the middle of a few exciting trends; China, mobile and gaming.

I’m talking about Momo (MOMO - Free Report) . Momo Inc. operates as a mobile-based social networking platform in the People’s Republic of China. The company’s platform includes its Momo mobile application and various related features, functionalities, tools, and services that are provided to users, customers, and platform partners. It offers Momo mobile application that enables users to establish and expand their social relationships based on locations and interests; and Hani, a live video application.

The reason for the favorable Zacks Rank here is the huge jump in our current year and next year’s Zacks Consensus Estimate. Based on analysts’ earnings estimates, we’ve seen a move from $1.20 to $1.40 on the current year number while next year’s number has jumped from $1.73 to $2.06. Add this to the series of recent earnings surprises to the upside and you see why this is ranked the way it is.

You can see this data on the Detailed Estimates page we have on On the same page you see some eye-popping growth numbers. Revenue growth for the current year is slated to come in at 126% year-over-year while next year’s growth is expected to be 38%. If you look over to EPS, the current year is calling for 97% EPS growth while next year should come in at 46% growth.

These huge numbers have provided plenty of fuel for a rally in shares of MOMO. So far 2017 has been a banner year, with the stock pushing up from the high teens to $46 before running out of gas. The recent retracement here has seen the stock pull back to $37, dipping below the 50-day moving average. The commodity channel index is oversold right night, indicating the stock could be due for a bounce soon.

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