Critical Review: Hello Group (NASDAQ:MOMO) versus CyberAgent (OTCMKTS:CYGIY)

CyberAgent (OTCMKTS:CYGIY) and Hello Group (NASDAQ:MOMO) are both communication services companies, but which is the better stock? We will contrast the two businesses based on the strength of their valuation, risk, earnings, institutional ownership, analyst recommendations, profitability and dividends.

Profitability

This table compares CyberAgent and Hello Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
CyberAgent	4.57%	17.63%	9.06%
Hello Group	11.02%	10.43%	8.41%

Volatility and Risk

CyberAgent has a beta of 0.33, suggesting that its stock price is 67% less volatile than the S&P 500. Comparatively, Hello Group has a beta of 0.45, suggesting that its stock price is 55% less volatile than the S&P 500.

Analyst Ratings

This is a summary of current recommendations and price targets for CyberAgent and Hello Group, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
CyberAgent	0	1	0	0	2.00
Hello Group	1	1	1	0	2.00

Hello Group has a consensus target price of $9.05, suggesting a potential upside of 81.36%. Given Hello Group’s higher probable upside, analysts plainly believe Hello Group is more favorable than CyberAgent.

Institutional and Insider Ownership

51.0% of Hello Group shares are owned by institutional investors. 61.4% of Hello Group shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Valuation & Earnings

This table compares CyberAgent and Hello Group”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
CyberAgent	$5.86 billion	0.65	$212.18 million	$0.27	13.89
Hello Group	$1.48 billion	0.36	$114.97 million	$0.98	5.09

CyberAgent has higher revenue and earnings than Hello Group. Hello Group is trading at a lower price-to-earnings ratio than CyberAgent, indicating that it is currently the more affordable of the two stocks.

Summary

Hello Group beats CyberAgent on 7 of the 13 factors compared between the two stocks.

About CyberAgent

CyberAgent, Inc. engages in the media, internet advertising, game, and investment development businesses primarily in Japan. The company operates Ameba, a blog service; Tapple for online dating; AWA, a music streaming service; and WinTicket for online betting. It also offers internet advertising agency and ad technology services; and smartphone games. In addition, the company operates a programming school for kids and provides application and reward points exchange platform services; artificial intelligence services; and digital transformation services. CyberAgent, Inc. was incorporated in 1998 and is headquartered in Tokyo, Japan.

About Hello Group

Hello Group Inc. provides mobile-based social and entertainment services in the People's Republic of China. It operates in three segments: Momo, Tantan, and QOOL. The company offers Momo, a mobile application that connects people and facilitates social interactions based on location, interests, and various online recreational activities, including live talent shows, short videos, social games, as well as other video- and audio-based interactive experiences, such as online parties, mobile karaoke and user participated reality shows; Tantan, a social and dating application; and other applications under the Hertz, Soulchill, Duidui, and Tietie names. The company also provides livestream services for various content and activities comprising talent shows, such as singing, dancing, and talk shows, as well as casual chatting, and other forms of interactions between broadcasters and viewers; value-added services; advertising and marketing services; and mobile games. The company was formerly known as Momo Inc. and changed its name to Hello Group Inc. in August 2021. Hello Group Inc. was incorporated in 2011 and is headquartered in Beijing, the People's Republic of China.