Yalla Group Limited American Depositary Shares each representing one Class A Ordinary Share (YALA)

FairStock Score: 72/100 — STEADY

Key Financials

AI Analysis

AI-generated, general educational analysis — not personal investment advice.

I look for businesses that earn high returns on capital and sell at a sensible price. Yalla operates voice-centric group chat and casual gaming apps in the Middle East and North Africa. In the latest reported quarter, fiscal Q2 2026, it produced $82.6 million of revenue and $31.8 million of net income, a 38.45% net margin. That is a wonderful margin, and the balance sheet is fortress-like: debt-to-equity is 0.01 and FairStock's Altman Z-Score is 8.93. Return on equity is 16.82%, though return on capital employed is only 7.30%, so capital efficiency is good but not exceptional. The trouble is growth: the reported figures show revenue growth of -5.81% and profit growth of -21.99%. A shrinking business needs a wider discount. At the 2026-10-13 close of $5.66, FairStock's P/E is 7.45, P/B is 1.00, and EV/EBITDA is 7.49. FairStock's Graham Number is $9.82, implying a 42.36% margin of safety, and the FairStock Score is 72/100. The Piotroski F-Score is 5/9, neutral. FairStock assigns no Lynch category because it has only 0 years of filed annual results under its rules, versus 3 needed. The market seems to price it as a cheap, cash-generative but declining niche operator. A durable competitive advantage is not obvious; the apps are popular in their region, but virtual goods and casual games face competition and shifting user tastes. I would want evidence of stabilizing revenue and profit before calling it a classic value opportunity.

In plain English: Yalla runs voice chat rooms and casual games, mainly for users in the Middle East and North Africa. In its latest reported quarter, it earned $31.8 million of profit on $82.6 million of sales, which is a high profit margin, but sales and profit have been shrinking. At $5.66, the price looks low compared with the company's earnings and accounting value, but the falling business makes that cheapness uncertain.

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Data as of 2026-10-13 close · note generated 2026-10-15 · model deepseek-flash

Fundamentals from company filings and market-data providers; prices are end-of-day, not real-time. AI-generated analysis is general and educational — not personal investment advice. Scoring methodology · Score test · Disclaimer