How Match Group Became A 'Show Me Story' Following Layoffs, Subscriber Exodus

Zinger Key Points
  • Has the dating app industry matured? Perhaps the strategy should be "premium" and not "freemium," analyst says.
  • Tinder's parent company gets downgraded from Outperform to Perform.

Match Group Inc MTCH joined the tech majors to announce layoff plans that reduce its global workforce by 8%.

The stock has become a "show me story," after the company lost a record number of paid subscribers in the latest quarter, according to Oppenheimer.

The Analyst: Jason Helfstein downgraded the rating for Match Group from Outperform to Perform.

Check out other analyst stock ratings.

The Thesis: While the company’s product roadmap is encouraging, the high subscriber loss has ignited concerns about the U.S. and Europe online dating market maturing, Helfstein said in the note.

The company attributed 268,000 Tinder subscriber losses to the removal of lower-priced tiers, Helfstein explained. Going forward, the strategy requires changing focus away from "freemium" to "premium" via large paid marketing campaigns, indicating a maturing business that has passed peak margins,” he added.

“Shares are trading at 10–13x '25E EBITDA; implied 17% downside to 14% upside, not compelling vs. peers at 14x EBITDA growth 30% vs. MTCH at 10%,” he added.

MTCH Price Action: Shares of Match Group had risen by 2.12% to $52.50 at the time of writing Thursday.

Next: 7 Analysts Have This To Say About Match Group

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Posted In: Analyst ColorNewsDowngradesTop StoriesAnalyst RatingsJason HelfsteinOppenheimer
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