MeetMe Completes If(We) Buyout, Rebrands to The Meet Group
MeetMe Inc. MEET recently announced that it has completed the acquisition of If(we) Inc., the parent company of Tagged and hi5. The company also changed its name from MeetMe to The Meet Group Inc., effective Apr 3, 2017.
We note that the acquisition will help MeetMe to expand its global portfolio of branded meeting apps that enable people to connect with one another.
Additionally, the acquisition is projected to contribute $9 million as adjusted EBITDA during the first 12 months following the close. Also, it will enable the merged entity to generate nearly $50 million in adjusted EBITDA and $150 million in annualized revenues.
Although the announcement fell short of cheering investors, as evident from a decline of 2.55% on Monday, we note that the scrip has considerably outperformed the Zacks Internet – Services industry over the last one year.
While the industry gained 7.6%, the stock appreciated a stellar 110.6%, primarily driven by growing adoption of its mobile meeting platform.
Our Take
We note that the mobile meeting and dating app market remains increasingly competitive with the presence of major networking platforms such as Jaumo, OkCupid, Happn and Scruff.
However, with MeetMe’s acquisition of If(we), the company has leveled out the competition to some extent.
Per MeetMe, If(we) had 2.3 million mobile and 5.4 million total monthly active users (MAU) at the end fourth-quarter 2016. The company believes that the acquisition will add 10.4 million mobile app chats per day and 18,000 new registered mobile app users on an average each day.
Also, MeetMe completed the acquisition of Skout, a dating app operator during the last reported quarter. This is also likely to help the dating site have a wider portfolio of apps and augurs well for it in the long run.
Zacks Rank & Other Stocks to Consider
At present, MeetMe carries a Zacks Rank #2 (Buy).
Stocks worth considering in the broader technology space include Autohome Inc. ATHM, sporting a Zacks Rank #1 (Strong Buy), and 21Vianet Group, Inc. VNET and Alphabet Inc. GOOGL each carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Notably, the Zacks Consensus Estimate for Autohome’s current year improved to $1.79 from $1.49 over the last 60 days.
Similarly, the Zacks Consensus Estimate for 21Vianet’s current year narrowed down to a loss of 30 cents from loss of 48 cents over the last 30 days.
Last but not the least, the Zacks Consensus Estimate for Alphabet’s current year improved to $32.87 from $32.57 over the last 60 days.
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