Analyst Introduces Buy Rating On MeetMe, Sees Almost 50% Upside

Although MeetMe Inc MEET's platform is lesser-known than other dating and social networking services, user trends within its target demographic have been strong and there seem to be “incremental monetization opportunities,” Canaccord Genuity’s Michael Graham said in a report.

While mentioning that MeetMe had gained “a promising spot on the social networking landscape,” Graham added that the acquisitions of Skout and if(we) seemed “promising” and there seems to be potential for further purchases.

In time, MeetMe could become an acquisition target, Graham commented, while initiating coverage of the company with a Buy rating and a price target of $10.

Sources Of Incremental Growth

The analyst identified the following sources of incremental growth:

1. International monetization: ~60 percent of the users are located outside the US. We estimate that U.S. average revenue per user is roughly 4x the level of international, but management has a plan to close the gap,” Graham wrote.
2. Revenue synergies from acquisitions: Compared to MeetMe, Skout has more expertise in international monetization and higher chats per daily average users, while if(we) has the highest user engagement.
3. Video livestreaming: The launch of video livestreaming on MeetMe in the first quarter and on Skout in Q3 could boost user engagement and advertising revenues for both platforms, Graham mentioned.

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