Over the past two decades, the internet's profound impact has revolutionized various aspects of life, transforming how people live, shop, socialize, and find entertainment. Technology adoption on a large scale, rising internet usage, and widespread use of mobile phones have radically changed how people communicate and conduct business, resulting in considerable breakthroughs in e-commerce.
The rising need for AI-powered features, notable expansion in cross-border trade opportunities, and innovations of secure digital payment systems contribute to the growth of the global e-commerce market. The global e-commerce market is expected to grow at a CAGR of 25.8% by 2033.
Against this backdrop, let’s compare two online platform stocks to analyze which stock deserves attention: Yelp Inc. (YELP) and Match Group, Inc. (MTCH).
The Case for Yelp Inc. Stock
With a $2.61 billion market cap, Yelp Inc. (YELP) operates a platform that connects consumers with local businesses in the United States and internationally. Its platform covers various categories, including restaurants, shopping, beauty and fitness, health, and other categories, as well as home, local, auto, professional, pets, events, real estate, and financial services.
On November 26, 2024, YELP, the trusted platform that connects people with great local businesses, announced that it had completed its previously announced planned acquisition of RepairPal, an auto services platform, for approximately $80 million in cash, subject to customary post-closing adjustments.
YELP’s stock has gained 15.3% over the past three months to close the last trading session at $39.71.
YELP’s 1.39x trailing-12-month asset turnover ratio is 182.5% higher than the 0.49x industry average. Also, its 12.04% trailing-12-month Return on Total Assets is 561.7% higher than the 1.82% industry average.
YELP’s net revenue for the third quarter, which ended on September 30, 2024, increased 4.4% year-over-year to $360.34 million. In addition, the company’s net income was $38.44 million, or $0.56 per share. Its adjusted EBITDA stood at $101.36 million.
For the fourth quarter ending December 2024, YELP’s revenue is expected to increase 2.2% year-over-year to $349.94 million. Its EPS for the ongoing quarter is expected to be $0.95. Moreover, the company surpassed revenue estimates in all the trailing four quarters, which is impressive.
YELP’s POWR Ratings reflect its promising outlook. The stock has an overall rating of A, which translates to a Strong Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.
The stock has an A grade for Growth and a B for Quality and Value. YELP is ranked first out of 51 stocks in the A-rated Internet industry.
In addition to the POWR Ratings I’ve just highlighted, you can see YELP’s ratings for Momentum, Stability, and Sentiment here.
The Case for Match Group, Inc. Stock
Valued at $7.90 billion by market cap, Match Group, Inc. (MTCH) engages in the provision of dating products. Its portfolio of brands includes Tinder, Hinge, Match, Meetic, OkCupid, Pairs, Plenty Of Fish, Azar, BLK, and Hakuna, as well as various other brands, each built to increase users' likelihood of connecting with others.
Shares of MTCH have surged 2.3% over the past month but declined 10.2% over the three months to close the last trading session at $31.45.
In terms of the trailing-12-month CAPEX/Sales, MTCH’s 1.73% is 52.7% lower than the 3.67% industry average. However, its 72.44% trailing-12-month gross profit margin is 38.6% higher than the 52.25% industry average.
MTCH’s revenue increased 85.9% year-over-year to $895.48 million for the fiscal 2024 third quarter that ended September 30, 2024. Moreover, the company’s net earnings came in at $136.48 million and $0.51 per share.
For the fourth quarter ending December 2024, MTCH’s revenue is expected to decrease marginally year-over-year to $861.71 million. Its EPS for the ongoing quarter is expected to be $0.84. However, the company surpassed revenue and EPS estimates in three of the trailing four quarters.
MTCH’s fundamentals are reflected in its POWR Ratings. The stock has an overall C rating, translating to Neutral in our proprietary rating system.
MTCH has a C grade for Momentum and Stability. It is ranked #28 in the same industry.
Click here for the additional POWR Ratings for MTCH (Growth, Value, Sentiment, and Quality).
Yelp Inc. (YELP) vs. Match Group (MTCH): Which Online Platform Stock Deserves Your Attention?
The online platform industry is expected to grow significantly in the coming years, driven by increasing internet penetration, widespread adoption of smartphones, and advancements in digital technologies
Leading online platform companies YELP and MTCH stand to capitalize on the optimistic industry outlook. However, YELP’s strong profitability might make it the better online platform stock pick.
Our research shows that the odds of success increase when one invests in stocks with an Overall Rating of Strong Buy or Buy. View all the top-rated stocks in the Internet industry here.
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MTCH shares were trading at $33.49 per share on Monday afternoon, up $2.04 (+6.49%). Year-to-date, MTCH has declined -8.25%, versus a 28.99% rise in the benchmark S&P 500 index during the same period.
About the Author: Nidhi Agarwal
Nidhi is passionate about the capital market and wealth management, which led her to pursue a career as an investment analyst. She holds a bachelor's degree in finance and marketing and is pursuing the CFA program. Her fundamental approach to analyzing stocks helps investors identify the best investment opportunities.
Yelp Inc. (YELP) vs. Match Group (MTCH): Which Online Platform Stock Deserves Your Attention? StockNews.com
