Momo Inc. operates as a mobile-based social networking platform in China. The company was founded in 2011 and is based in Beijing, China.
MOMO Price Forecast Based on DCF Valuation
DCF Fair Value Target:
Below please find a table outlining a discounted cash flow forecast for MOMO, in which we model out valuation assuming a variety of terminal growth rates. To summarize, we found that Momo Inc ranked in the 99th percentile in terms of potential gain offered. As the table below shows, the model suggests the stock is dramatically undervalued -- investors should note, though, that such returns are always unlikely and not to be expected. In terms of the factors that were most noteworthy in this DCF analysis for MOMO, they are:
As a business, MOMO is generating more cash flow than 92.44% of positive cash flow stocks in the Technology.
The business' balance sheet reveals debt to be 7% of the company's capital (with equity being the remaining amount). Approximately just 17.48% of US stocks with free cash flow have a lower reliance on debt in their capital structure.
MOMO's estimated cost of debt, based largely on its market capitalization and its interest coverage ratio, is 2%; for context, that number is higher than 44.23% of tickers in our DCF set.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
SEDG, LITE, OKTA, PRSP, and TRT can be thought of as valuation peers to MOMO, in the sense that they are in the Technology sector and have a similar price forecast based on DCF valuation.
Similar to many US-listed Chinese companies, Momo (MOMO) shares have sold off since the outbreak of COVID-19 in China five months ago. After peaking at $40 on January 13, 2000, shares have dropped over 50% before stabilizing around the $20 level during the past three months. Consolidation near multi-year support...
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