Shares of socializing and dating website The Meet Group (NASDAQ:MEET) closed down 8.2% on Monday, the stock's third declining trading day in a row. There's been no apparent catalyst for the declines, however -- not unless you consider Goldman Sachs' downgrade of Meet competitor Match Group a week ago to be a catalyst.
And that may be good news for investors.
At least, so thinks Roth Capital, which this morning interrupted Meet Group's regularly scheduled share-price slide to announce that it still thinks this stock is a buy. Doubling down on its existing buy rating, Roth argues that "this material pullback creates a buying opportunity in what is a fundamentally sound story," in a note covered on StreetInsider.com today.
Says the analyst: "[F]undamental checks of App Annie and other services we use to track MeetMe, Lovoo and its portfolio of apps [are] basically unchanged." And with no bad news about Meet's business, Roth sees no reason for Meet's stock to have lost 10% of its value over the last three days.
Well...no reason except for valuation, maybe. As fellow Fool and tech enthusiast Rick Munarriz noted last month, Meet Group stock surged 64% in price last year. It can't come as any great surprise that, after a run like that, Meet might give back some of its gains this year.
After all, the company doesn't appear to have earned a profit last year (preliminary earnings results released last month, at least, didn't mention any GAAP profits). Still, according to analysts polled by S&P Global Market Intelligence, Meet is expected to earn a profit this year.
If it succeeds, I wouldn't be a bit surprised to see Roth proven right, and Meet stock turning around.