Why Momo Stock Popped 7.5%

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What happened

Investors have been worried about Chinese dating app company Momo (NASDAQ: MOMO) this month -- ever since "China's Tinder" warned last month that "certain mobile app stores in China have removed the Tantan mobile app on direction of governmental authorities in China."

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But nothing succeeds like success, and Momo arguably put a lot of those worries to rest when it reported, this morning, that fiscal Q1 earnings of $0.62 per share on sales of $554.7 million exceeded analyst predictions of $0.54 per share on sales of $526.7 million. Momo shares are up 7.5% in response as of 12:50 PM EDT.

So what

Admittedly, these numbers weren't quite as good as the headlines make them look. Momo's Q1 "earnings" were actually of the "non-GAAP (generally accepted accounting principles) diluted net income per American depositary share" variety, and actual GAAP earnings for the quarter were only $0.20 per ADS.

Still, this was more than analysts had expected Momo to earn, and sales did come in a good 5% ahead of estimates -- and up 35% year over year.

Now what

Even more encouraging was Momo's guidance for Q2, which analysts have been fearing would take a hit on Chinese regulatory concerns. Instead of the 17% sales growth that Wall Street was warning us to expect, though, Momo said this morning it expects sales to grow between 27% and 30%.

No word on earnings yet, but for now, just the confirmation that sales are still growing strongly appears to be enough good news for investors.

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Rich Smith has no position in any of the stocks mentioned. The Motley Fool recommends Momo. The Motley Fool has a disclosure policy.