+ 1.59
+ 0.46%
+ 0.70
+ 0.21%
+ 1.53
+ 0.36%

Match Group Is a Global Online Dating Leader, But Shares Are Fairly Valued, JPMorgan Says In Downgrade

February 21, 2018 10:14 am
Share to Linkedin Share to Twitter Share to Facebook Share to Print License More

After surging more than 175 percent over the past year, Match Group Inc (NASDAQ:MTCH)'s stock is now fairly valued with fewer catalysts ahead, according to JPMorgan. 

The Analyst

JPMorgan's Doug Anmuth downgraded Match Group from Overweight to Neutral with an unchanged $42 price target.

The Thesis

Match Group, the parent company of multiple dating platforms including Tinder, is expected to remain a global leader in the sector — but three factors are likely to limit continued upside in the stock, Anmuth said. They are:

  • Expectations for Tinder net adds to trend down and return to a more normalized level, while the platform has fewer product catalysts ahead.
  • Other dating apps remain stable but are likely to post a low-single-digit sub growth, short of management's expectations for a mid-to-high-single digit growth rate.
  • The stock's valuation is fairly valued at 32x 2019E GAAP P/E and 19x 2019E EV/EBITDA.

Investors may want to consider instead owning shares of IAC/InterActiveCorp (NASDAQ:IAC). The company is Match Group's largest shareholder and spun off a portion of Match Group in its 2015 initial public offering, the analyst said.

IAC's stock is "more compelling," as its valuation implies that the non-dating and ANGI Homeservices' assets are trading at a negative enterprise value, Anmuth said. 

Price Action

Shares of Match Group were trading lower by 0.36 percent Wednesday morning. 

Related Links:

New Names, Old Classics Among Short Sellers' Top Stocks

Oppenheimer Swipes Left: Match Group Downgraded On Rich Valuation

Photo courtesy of Tinder. 

For the latest in financial news, exclusive stories, memes follow Benzinga on Twitter, Facebook & Instagram. For the best interviews, stock market talk & videos, subscribe to our YouTube channel.

Related Articles

Why IAC, Match Investors Should Pay Attention To Lawsuit From Tinder's Founders

Tinder co-founder Sean Rad and other early employees filed a lawsuit against IAC/Interactivecorp (NASDAQ: IAC)/ Match Group Inc (NASDAQ: MTCH) in 2018, and investors should read more

UBS Swipes Left On Match, Finds Valuation Unattractive

The Street Sees Match-IAC Split As Win-Win

Analysts: Match Spinoff Should Be Good For IAC