Valued at a market cap of $9.8 billion, Match Group, Inc. (MTCH) is a leader in the online dating industry. Based in Dallas, Texas, the company offers a range of dating services available in over 40 languages, facilitating connections for diverse users across different demographics.
Shares of the media and internet company have significantly underperformed the broader market over the past 52 weeks. MTCH has risen 9% over this time frame, while the broader S&P 500 Index ($SPX) has rallied 35.8%. In 2024, shares of MTCH are down 10.4%, compared to SPX’s 24.3% gain on a YTD basis.
Focusing more closely, Match Group has also lagged behind the Communication Services Select Sector SPDR ETF Fund’s (XLC) 41.4% return over the past 52 weeks and a 31.9% YTD return.
Match Group has underperformed due to a decline in paid users, particularly driven by Tinder, declining operating margins, increasing competition, and a challenging economic environment impacting consumer spending.
On Nov. 6, Match Group projected Q4 revenue between $865 million and $875 million below Wall Street estimates, signaling a slower-than-expected turnaround for its dating apps, including Tinder. The company missed Q3 revenue estimates, posting $895.5 million, and reported a 3% decline in total paying users and an eighth consecutive quarter of decline for Tinder users. Despite Hinge’s growth, the overall slowdown in demand, economic uncertainty, and lack of new features have impacted Match’s performance, prompting concerns from activist investors.
For the current fiscal year, ending in December, analysts expect MTCH’s EPS to decline 13.3% year-over-year to $1.96. However, the company's earnings surprise history is promising. It topped or met the consensus estimates in the last four quarters. In Q3, MTCH reported a profit of $0.51 per share, beating the consensus estimate by 10.9%.
Among the 25 analysts covering the stock, the consensus rating is a “Moderate Buy.” That’s based on 15 “Strong Buy” ratings, one “Moderate Buy,” and nine “Holds.”
On Oct. 8, Wells Fargo lowered its price target for Match Group to $35 and maintained an “Equal-Weight” rating, citing more conservative assumptions about Tinder's performance and the potential for Q4 guidance to miss consensus.
The mean price target of $43.67 represents a premium of 15.3% to MTCH's current levels. The Street-high price target of $55, implies a potential upside of 45.2% from the current price levels.
On the date of publication, Sohini Mondal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
