True Love Or Last Resort? Morgan Stanley Takes On Match Group

It isn’t hard to find love when there’s no competition. Match Group Inc MTCH is the only online dating service on the public markets, but last resort or not, it’s found itself a mate.

The Rating: Morgan Stanley analysts Lauren Cassel and Brian Nowak initiated coverage on Match with and Overweight rating and a $103 price target.

The Thesis: Lockdown was a lonely experience for many single Americans. A lifting of their forced solitude may inspire a rush to the apps.

“We see a long and growing runway for growth given demographic tailwinds and greater adoption of online dating,” the analysts wrote, citing a global addressable market of about 600 million with 3.5% compound annual growth.

The coronavirus impetus compounds other favorable trends for dating apps, including a peak in the U.S. single population, an increase in young daters as a proportion of the single population, and the continued global penetration of internet and smartphone access.

Overall, Morgan Stanley anticipates 13% subscriber growth over the next five years, with Match nearly doubling its global payer penetration driven by international subscriptions.

“We view MTCH as a must-own structural grower in early innings with dominant market share,” Cassel and Nowak wrote. “As singles crave human interaction in a post COVID world, we model accelerating 2021 sub growth.”

MTCH Price Action: At the time of publication, Match traded down marginally around $89.

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Photo courtesy of Tinder.