Back to top

Image: Bigstock

Meet Group (MEET) to Report Q2 Earnings: What's in Store ?

Read MoreHide Full Article

The Meet Group is set to report second-quarter 2019 results on Jul 31.

The company’s earnings beat the Zacks Consensus Estimate in two of the trailing four quarters, the average positive surprise being 11%.

In the last reported quarter, Meet Group reported earnings of 9 cents, in line with the Zacks Consensus Estimate.

Revenues increased 32% year over year to $49.5 million, better than the consensus mark of $48 million.

Average video revenue per daily active video user increased to 26 cents in the first quarter, up from 18 cents reported in fourth-quarter 2018. Management stated that approximately 20% of users engaged in video every day.
 

MeetMe, Inc. Price and EPS Surprise

MeetMe, Inc. Price and EPS Surprise

MeetMe, Inc. price-eps-surprise | MeetMe, Inc. Quote

Q2 Expectations

For second-quarter 2019, Meet Group expects revenues between $50.3 million and $51.9 million.

Video revenues are projected to grow sequentially to $21 million, attributable largely to the company’s participation at a leading streamer event.

Moreover, adjusted EBITDA is expected in the range of $8.6 - $9.1 million.

The Zacks Consensus Estimate for revenues currently stands at $50.7 million, indicating growth of 18.38% from year-ago quarter reported figure.

The consensus mark for second-quarter earnings has remained steady at 10 cents over the past 30 days, suggesting growth of 80% from the year-ago quarter reported figure.

Key Factors to Consider

Meet Group’s top line is expected to benefit from higher video revenues driven by a growing user base in the second quarter.

Notably, in the first quarter, average total Daily Active Users (DAUs) increased to 4.93 million from 4.85 million reported in the year-ago quarter. Average mobile DAU increased 1% year over year and 0.6% sequentially.

Moreover, the addition of video chat along with existing text-based chat conversation in the MeetMe app is expected to drive video DAU (vDAU) and ultimately video revenues.

Further, the company expects increasing awareness of its brand and improving user engagement to be major video revenue drivers in the to-be-reported quarter.

Additionally, the company’s live-streaming apps (MeetMe, LOVOO, Tagged and Skout) are being rapidly adopted by millennials, which is a positive. Also, the completion of GROWLr acquisition in March 2019 is expected to boost same-sex DAU base.

The battle and level features of the company have boosted user engagement. These are expected to continue expanding vDAU that is likely to aid video average revenue per DAU in the soon-to-be-reported quarter.

However, margins are expected to remain under pressure due to growing investments and unfavorable revenue mix. Notably, user pay is a lower margin business compared with advertising.

What Our Model Says

According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) along with a positive Earnings ESP has a good chance of beating estimates. Meanwhile, Sell-rated stocks (Zacks Rank #4 or 5) are best avoided.

Meet Group has a Zacks Rank #3 and an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks That Warrant a Look

Here are three stocks you may want to consider, as our model suggests that these have the right combination of elements to deliver an earnings beat this earnings season.

Zendesk has an Earnings ESP of +7.84% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here

Ciena (CIEN - Free Report) has an Earnings ESP of +5.26% and a Zacks Rank #2.

CACI International (CACI - Free Report) has an Earnings ESP of +4.02% and a Zacks Rank #2.

Radical New Technology Creates $12.3 Trillion Opportunity

Imagine buying Microsoft stock in the early days of personal computers… or Motorola after it released the world’s first cell phone. These technologies changed our lives and created massive profits for investors.

Today, we’re on the brink of the next quantum leap in technology. 7 innovative companies are leading this “4th Industrial Revolution” - and early investors stand to earn the biggest profits.

See the 7 breakthrough stocks now>>


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


Ciena Corporation (CIEN) - free report >>

CACI International, Inc. (CACI) - free report >>

Published in