The MEET Group (MEET)
The Meet Group is currently suffering from lofty expectations set by the Street. This will not last for too long.
The Meet Group appeared on my radar in early 2016 when trading between $3 and $4, before its rise and peak at $8.11. It met criteria of both growth and value, with modest ratios suggesting a discount on the growth component of the equation. Currently trading 15% above its 52-week low of $2.19 ($6.45 52-week high), ratios are again suggesting a risk-to-reward proposition worth a closer look.
A PEG ratio of .34 seems compelling, although analysts are concerned by the most recent conference call and declines in the underlying driving key metrics by which MEET is measured against. The book value is $3.45, sporting a “left-for dead” price/book ratio of .74.
On 11/9/17 JPMorgan downgraded the stock from Outperform to Market perform and Canaccord Genuity issued a downgrade from Buy to Hold. Micro-cap stocks tend to fluctuate wildly to analyst changes and an can open an opportunity to take advantage of dramatic overselling.
Stock performance has been dismal and discouraging for anyone holding since the $8, $6, $5 and $4 ranges. It’s very clear when looking at the 2-year timeframe, how MEET’s expectations were set and subsequently failed resulting and a series of large drops, each appearing as major bear traps in hindsight. The short ratio, standing at about 15%, has handsomely rewarded those taking a pessimistic view.
By contrast Match.com MTCH has performed exceedingly well this year while not having to many believers as evidenced by a 37.5% short ratio.
Will the divergence continue?
About MEET:
Employees: 120+
The Meet Group (NASDAQ: MEET) is a fast-growing portfolio of mobile apps designed to meet the universal need for human connection. Our apps – currently MeetMe®, LOVOO®, Skout®, Tagged®, and Hi5® – let users in more than 100 countries chat, share photos, stream live video, and discuss topics of interest, and are available on iPhone, iPad, and Android in multiple languages. Using innovative products and sophisticated data science, The Meet Group keeps its over 4.5 million mobile daily active users engaged and originates untold numbers of casual chats, friendships, dates, and marriages. The Meet Group offers advertisers the opportunity to reach customers on a global scale and has leading mobile monetization strategies, including advertising, in-app purchases, and subscription products. The Meet Group has offices in New Hope, San Francisco, Dresden, and Berlin. For more information, visit themeetgroup.com, and follow us on Facebook, Twitter or LinkedIn.