What happened

Shares of MeetMe Inc. (NASDAQ:MEET) jumped 21.9% in the month of March, according to data provided by S&P Global Market Intelligence, after the budding social media technologist announced strong fourth-quarter 2016 results.

So what

Shares climbed 14% in the first trading day following MeetMe's quarterly release. In it, MeetMe confirmed revenue had increased 47%, to $29.2 million, while adjusted net income rose 56%, to $12.4 million, or $0.19 per share. By comparison, Wall Street was modeling lower revenue and earnings of $28.8 million and $0.16 per share, respectively.

Teenagers using cell phones


Also within that report, MeetMe revealed it has executed a $60 million cash acquisition of fellow social media and mobile tech company If(we), Inc.

"The addition of if(we)'s Tagged and hi5 brands into our portfolio is expected to increase our monthly active users to more than 10 million," added MeetMe CEO Geoff Cook, "giving us even greater scale for monetization and increased profits."

The deal is expected to be accretive to MeetMe's earnings and free cash flow within the first year after the transaction closes later this quarter. 

Now what

As it stands, MeetMe stock has nearly doubled over the past year, including a more than 12% climb so far in 2017 thanks to its strong showing last month. But shares still trade at just 8.2 times this year's expected earnings. And if MeetMe's latest acquisition indeed provides a welcome push toward greater profitability, I think the stock could have plenty of room to climb from here.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.