Match Group, Inc. (MTCH), valued at $9.7 billion by market cap, is a top provider of dating products. Established in 1986 and headquartered in Dallas, it manages over 45 brands, including popular ones like Tinder, Match.com, PlentyOfFish, Meetic, and OkCupid.
Shares of Match Group have underperformed the broader market considerably over the past year. MTCH has declined 18.6% over this time frame, while the broader S&P 500 Index ($SPX) is up 15.8%. In 2024 alone, the stock is down 2.3%, compared to SPX’s 8.7% return on a YTD basis.
Narrowing the focus, MTCH has also paced behind the S&P 500 Communication Sector SPDR (XLC), which has gained 22.7% over the past year.
Despite its poor price performance compared to the broader market this year, MTCH shares rose more than 14% in the two trading sessions following its Q2 earnings report released on Jul. 30, which exceeded Wall Street's expectations, and beat EPS and revenue guidance. Tinder's direct revenue grew 1% annually to $480 million, and its payer base increased by 8%. Even with reduced marketing for the typically slower fourth quarter, the company expects continued user and payer growth.
Additionally, on Jul. 16, MTCH stock climbed over 7% after activist investor Starboard Value disclosed a 6.6% stake in Match Group and urged the company to consider a sale if it cannot revitalize its business. Starboard, along with Elliott Investment Management and Anson Funds Management, is pushing for changes due to post-pandemic growth slowdowns and delays in new features for apps like Tinder.
For the current fiscal year, ending in December, analysts expect MTCH’s EPS to decline 12.4% year over year to $1.98. However, the company’s earnings surprise history is solid. It exceeded or met the consensus estimate in each of the last four quarters.
Match Group stock has a consensus “Moderate Buy” rating overall. Out of 24 analysts covering the stock, 14 rate it as a "Strong Buy," one suggests a "Moderate Buy," and nine advise a "Hold.”
This configuration is slightly less bullish than a month before, with 13 analysts advising a “Strong Buy” rating.
Following Match Group's impressive Q2 earnings report, multiple brokerage firms have adjusted their ratings for the stock. On Jul. 31, Deutsche Bank Aktiengesellschaft (DB) analyst Benjamin Black reaffirmed its “Buy” rating with a $38 price target, highlighting the company's significant improvement and positive outlook. He emphasized Match Group's status as a market leader with high margins and low capital requirements, as well as the stabilization of monthly active users and an optimistic trend in user growth.
The mean price target of $40.53 suggests a 13.7% premium to MTCH from current levels. The Street-high target of $55 represents an impressive upside potential of 54.2%.
On the date of publication, Kritika Sarmah 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.
