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What's in Store for The Meet Group (MEET) in Q3 Earnings?

Zacks Equity Research

The Meet Group MEET is set to report third-quarter 2019 results on Nov 7.

For third-quarter 2019, Meet Group expects revenues to be in the range of $52 million to $52.3 million.

The Zacks Consensus Estimate for revenues currently stands at $51.6 million, indicating growth of 12.8% from the year-ago quarter reported figure.

The consensus mark for third-quarter earnings has remained steady at 12 cents over the past 30 days, suggesting growth of 33.3% from the year-ago quarter reported figure.

In the last reported quarter, Meet Group reported earnings of 11 cents, which beat the Zacks Consensus Estimate by 1 cent.

Revenues increased 22% year over year to $52 million, better than the consensus mark of $51 million.

The company’s earnings beat the Zacks Consensus Estimate in two of the trailing four quarters, the average positive surprise being 5.28%.

MeetMe, Inc. Price and EPS Surprise

MeetMe, Inc. Price and EPS Surprise

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

Key Factors to Consider

Meet Group is leveraging live streaming video to create a unique social, dating and entertainment experience in its portfolio of mobile apps, which is expected to have driven revenues in third-quarter 2019.

The company’s top line in the to-be reported quarter is expected to have benefited from higher video revenues driven by a growing user base.

Meet Group expects video revenues to be more than $20 million in third-quarter 2019.

Additionally, the company launched a number of industry-first safety practices including the Report Abuse button, within the newly released iOS and Android versions of its MeetMe app, which is likely to have boosted user confidence and engagement during the quarter.

Notably, in the second quarter, average total daily active users (DAUs) increased 7.8% year over year to 5.12 million. Average mobile DAU increased 10.4% year over year and 4.8% sequentially.

New feature additions during the to-be-reported quarter including streamer levels, VIP badges, and first time buyer bonuses are likely to have contributed to growth in video DAUs (vDAU).

Moreover, the addition of video chat along with existing text-based chat conversation in the MeetMe app is also expected to have driven third-quarter vDAUs and eventually video revenues.

The battle and level features of the company are expected to have boosted user engagement. These are expected to have aided vDAU and video average revenue per DAU in the to-be-reported quarter.

Average video revenue per daily active video user increased to 26 cents in the second quarter 2019, up from 15 cents reported in the year-ago quarter.

Incentive video advertising and more gamifying features added in live videos through Levels on the MeetMe app are expected to have driven third-quarter video monetization.

However, margins are expected to have been dampened by growing investments in user safety and unfavorable revenue mix. Notably, user pay is a lower margin business compared with advertising.

What Our Model Says

According to the Zacks model, the combination of a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) and a positive Earnings ESP increases the odds of an earnings beat.

Meet Group has a Zacks Rank #2 and an Earnings ESP of 0.00%, which makes surprise prediction difficult. 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 some companies, which, per our model, have the right combination of elements to post an earnings beat this quarter:

iHeartMedia IHRT has an Earnings ESP of +3.17% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Liberty Broadband LBRDK has an Earnings ESP of +5.75% and a Zacks Rank #2.

Twin River Worldwide Holdings TRWH has an Earnings ESP of +13.25% and a Zacks Rank #2.

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