Yalla Group Ltd (NYSE: YALA)

Sector: Technology Industry: Software - Application CIK: 0001794350
Market Cap 1.11 Bn
P/B 1.41
P/E 7.50
P/S 3.17
ROIC (Qtr) 15.81
Div Yield % 0.00
Rev 1y % (Qtr) 0.80
Total Debt (Qtr) 489,459.00
Debt/Equity (Qtr) 0.00

About

Yalla Group Ltd, known by its stock symbol YALA, operates in the technology industry as a leading online social networking and gaming company in the Middle East and North Africa (MENA) region. The company was founded in 2016 and has since established itself as the largest MENA-based online social networking and gaming company in terms of revenue, according to Frost and Sullivan. Yalla Group's main business activities are centered around its two flagship mobile applications, Yalla and Yalla Ludo, which cater to the social networking and gaming needs...

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Price action

Investment thesis

Bull case

  • Healthy cash reserves of 424.22M provide 1825.92x coverage of short-term debt 232331, demonstrating strong liquidity position and minimal refinancing risk.
  • Strong tangible asset base of 868.71M provides 1774.83x coverage of total debt 489459, indicating robust asset backing and low credit risk.
  • Tangible assets of 868.71M provide exceptional 15.08x coverage of deferred revenue 57.62M, showing strong service capability backing.
  • Retained earnings of 485.40M provide full 1887.78x coverage of long-term debt 257128, indicating strong internal capital position.
  • Long-term investments of 81.74M provide solid 317.89x coverage of long-term debt 257128, indicating strategic financial planning.

Bear case

  • Investment activities of 0 provide weak support for R&D spending of 33.97M, which is 0x, suggesting potentially insufficient investment in innovation relative to other capital deployment.
  • Operating cash flow of 0 provides insufficient coverage of deferred revenue obligations of 57.62M, which is 0x, raising concerns about future service delivery capabilities.
  • Long-term investments of 81.74M represent a high 5.27x of fixed assets 15.52M, indicating potential overexposure to financial assets versus operational capabilities.
  • Retained earnings of 485.40M provide limited buffer against comprehensive income items of (2.40M), which is -202.51x, indicating elevated exposure to market risks.
  • Operating cash flow of 0 provides minimal 0x coverage of tax expenses of 7.94M, suggesting potential tax planning inefficiencies or unsustainable tax positions.

Peer comparison

Companies in the Software - Application
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 SAP Sap Se 288.31 Bn 34.60 6.72 10.73 Bn
2 CRM Salesforce, Inc. 248.32 Bn 34.38 6.16 11.14 Bn
3 SHOP Shopify Inc. 212.27 Bn 119.19 19.85 1.12 Bn
4 INTU Intuit Inc. 180.73 Bn 43.89 9.30 6.78 Bn
5 UBER Uber Technologies, Inc 178.38 Bn 10.72 3.60 12.19 Bn
6 NOW ServiceNow, Inc. 146.98 Bn 84.91 11.60 2.40 Bn
7 ADBE Adobe Inc. 144.48 Bn 20.77 6.23 6.64 Bn
8 ADP Automatic Data Processing Inc 108.20 Bn 26.16 5.18 9.77 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.88 2.65
EV to Cash from Ops. EV/CFO 4.42 13.37
EV to Debt EV to Debt 1,559.34 57.69
EV to EBIT EV/EBIT 4.91 19.12
EV to EBITDA EV/EBITDA 6.16 15.00
EV to Free Cash Flow [EV/FCF] EV/FCF 4.44 14.69
EV to Market Cap EV to Market Cap 0.69 -92.28
EV to Revenue EV/Rev 2.19 4.60
Price to Book Value [P/B] P/B 1.41 4.26
Price to Earnings [P/E] P/E 7.50 -136.90
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 -3.95
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 4.25
Dividend per Basic Share Div per Share (Qtr) 0.00 0.15
FCF Dividend Payout Ratio % FCF Dividend Payout Ratio % 0.00 2.52
Interest Coverage Interest Coverage 0.00 -52.32
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex Growth (1y) % 0.00 -259.78
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 21.36 9,763.58
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 1.61
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 9.90 -263.15
EBITDA Growth (1y) % EBITDA Growth (1y) % 0.00 56.46
EBIT Growth (1y) % EBIT 1y % (Qtr) 6.96 -225.15
EBT Growth (1y) % EBT 1y % (Qtr) 6.96 -86.10
EPS Growth (1y) % EPS 1y % (Qtr) 10.59 123.84
FCF Growth (1y) % FCF Growth (1y) % 0.00 -36.82
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 10.73 95.08
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.40 0.58
Cash Payout Ratio Cash Payout Ratio 0.00 0.02
Cash Ratio Cash Ratio (Qtr) 4.88 3.75
Current Ratio Curr Ratio (Qtr) 8.87 8.16
Debt to Equity Ratio Debt/Equity (Qtr) 0.00 0.17
Interest Cover Ratio Interest Cover Ratio 0.00 -52.32
Times Interest Earned Times Interest Earned 0.00 -52.32
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % 0.00 -100.06
EBIT Margin % EBIT Margin % (Qtr) 44.57 -164.24
EBT Margin % EBT Margin % (Qtr) 44.57 -116.94
Gross Margin % Gross Margin % (Qtr) 66.60 58.20
Net Profit Margin % Net Margin % (Qtr) 42.30 -121.65