Match Group, Inc. – Tinder Growth Momentum Continues…

By Victor Anthony

Match delivered a strong quarter, beating our estimates on revenue, Adj. EBITDA and EPS, with Tinder subs coming in 58K above our estimate. Tinder’s sub growth momentum is expected to continue with MTCH guiding for Tinder average subs of over 1M this year, versus the 1.2M added in 2018, while facing rising competition in the sector. MTCH has not seen an impact from Facebook Dating in the markets in which the product was launched. The focus this year will be on driving increased Tinder monetization, investing in Hinge, where they see increased monetization in 2020, and expanding into emerging markets like India. Match is a good business, with defensible moats, that’s operating in a secular growth market. The model produces strong free cash flow which could be used to further consolidate the market, return capital, and delever. There remains ample opportunity to increase paid penetration of Tinder MAUs across the globe and drive increased monetization. Furthermore, we anticipate an event with the IAC share ownership this year. We increased our estimates and increased our price target to $70.

Full Report: Match Group – Tinder Growth Momentum Continues…