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Does The Data Make Momo Inc. (NASDAQ:MOMO) An Attractive Investment?

Simply Wall St

Attractive stocks have exceptional fundamentals. In the case of Momo Inc. (NASDAQ:MOMO), there’s is a financially-robust company with a strong history and an optimistic growth outlook. In the following section, I expand a bit more on these key aspects. For those interested in digger a bit deeper into my commentary, take a look at the report on Momo here.

Good value with reasonable growth potential

Investors seeking high cash growth potential should consider MOMO, with forecasted operating cash flow growth of 63%. This underlies the notable 25% return on equity over the next few years leading up to 2022. MOMO has a strong track record of performance. In the previous year, MOMO delivered an impressive double-digit return of 25% Not surprisingly, MOMO outperformed its industry which returned 15%, giving us more conviction of the company’s capacity to drive bottom-line growth going forward.

NasdaqGS:MOMO Past and Future Earnings, March 16th 2019

MOMO’s strong financial health means that all of its upcoming liability payments are able to be met by its current cash and short-term investment holdings. This implies that MOMO manages its cash and cost levels well, which is an important determinant of the company’s health. MOMO seems to have put its debt to good use, generating operating cash levels of 0.68x total debt in the most recent year. This is also a good indication as to whether debt is properly covered by the company’s cash flows.

NasdaqGS:MOMO Historical Debt, March 16th 2019

Next Steps:

For Momo, there are three important aspects you should further research:

  1. Valuation: What is MOMO worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether MOMO is currently mispriced by the market.
  2. Dividend Income vs Capital Gains: Does MOMO return gains to shareholders through reinvesting in itself and growing earnings, or redistribute a decent portion of earnings as dividends? Our historical dividend yield visualization quickly tells you what your can expect from MOMO as an investment.
  3. Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of MOMO? Explore our interactive list of stocks with large potential to get an idea of what else is out there you may be missing!

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.