Concerns Over Tinder's Prospects Despite Match's Multiple Catalysts Keeps Analyst At Sidelines

Concerns Over Tinder's Prospects Despite Match's Multiple Catalysts Keeps Analyst At Sidelines
  • Citigroup analyst Ygal Arounian initiated coverage on Match Group Inc MTCH with a Neutral rating and a price target of $55.
  • Match Group does have multiple potential catalysts and valuation levels that are as attractive as they have been since 2019.
  • Still, the analyst initiated coverage on the sidelines as Match currently has multiple new initiatives too early for him to understand. 
  • Hinge is the shining star at Match Group, with expansion and monetization growth still in earlier days. 
  • Tinder is undergoing a rebuild of sorts. The rebuild includes efforts to improve its branding and monetization as both have come under pressure with market share losses in time spent and users. 
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  • The analyst believes it's unlikely MTCH shares work long-term without Tinder seeing improvements in trends. 
  • The analyst looks to see incremental progress on Tinder's rebuild and signs of improvements in payer conversions and propensity to spend. 
  • In November 2022, Match Group reported that its third-quarter revenue increased 1% year-over-year to $810 million, which beat average analyst estimates of $795.43 million. The company reported quarterly earnings of 44 cents per share, which beat average forecasts of 41 cents per share.
  • During Match's Q3 results, it shared plans to focus on Tinder growth as it heads into 2023 and on targeted, high-return investments, especially in Hinge and The League and some newly-incubated apps.
  • This January, Tinder lost its chief product officer Josh Sell who joined N3twork Studios as the chief operating officer to pursue web3 gaming ambitions.
  • Price Action: MTCH shares traded higher by 1.35% at $51.22 on the last check Thursday.

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