Why I'm Buying Baozun But Avoiding Momo

Chinese tech stocks Momo (NASDAQ: MOMO) and Baozun (NASDAQ: BZUN) both posted triple-digit gains this year, but those rallies abruptly ended with double-digit declines after they released their earnings reports in late August. But the odd thing is that both companies soundly beat analyst expectations.

Momo, which produces a social app for chatting with nearby users, saw its second quarter revenue rise 215% annually to $312 million -- beating estimates by nearly $26 million. Its non-GAAP net income nearly tripled to $0.35 per share, topping expectations by four cents. Its monthly active users (MAUs) rose 22% annually to 91.3 million.

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Source: Fool.com