Momo Stock Rallies on Q1 Earnings Beat

NEW YORK (TheStreet) -- Momo (MOMO) - Get Report stock is advancing 7.24% to $12.88 on heavy trading volume on Tuesday afternoon after the company delivered earnings that surpassed estimates and strong revenue growth for the 2016 first quarter.

Before today's market open, the Beijing-based social networking operator reported earnings of 6 cents per share for the first three months of the year, topping estimates of 5 cents per share.

Revenue increased 93% year over year to $50.92 million for the quarter ended March 31, driven by strong mobile marketing revenue. Revenue estimates for the quarter are unavailable.

Monthly active users declined to 72.3 million by the end of the quarter from 78.1 million as of March 2015. Monthly active users had increased from 69.8 million as of December. 

"MAUs are back on the growth track on a sequential basis, thanks to our relentless efforts on product optimization and innovations to drive better user experience," CEO Yan Tang said in a statement.

So far today, 2.55 million shares of Momo have exchanged hands, compared with its average daily volume of 1.92 million shares.

Separately, Momo has a "hold" rating and a letter grade of C- at TheStreet Ratings because of the company's robust revenue growth, largely solid financial position with reasonable debt levels by most measures and solid stock price performance, which offsets disappointing return on equity.

You can view the full analysis from the report here: MOMO

TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this article's author.