Match Group, Inc.

MTCH Details

Match Group, Inc. (NASDAQ: MTCH) is a global provider of dating solutions through its collection of firms. Tinder, Match, Hinge, Meetic, OkCupid, Pairs, PlentyOfFish, OurTime, Azar, and Hakuna Live, are among the company's portfolio of brands geared to help users find a match. Tinder Gold, Tinder Platinum, Super Likes, Tinder Explore, and the Swipe Night interactive series are among the company's premium offerings. Pairs is a dating website that aims to overcome the social barriers that often accompany the use of dating services in Eastern Asian nations, particularly Japan. Hakuna Live is a social, interactive tool that allows one-to-many live broadcasting.

Latest News:

• Filing Suit Against Google: On May 9, 2022, MTCH filed a lawsuit against Google for strategic market manipulation, broken promises, and power abuse in pushing Match Group to use Google's invoicing system to stay in the Google Play Store. Google's requirement will eliminate user choice on Match Group apps and raise consumer costs by allowing Google to levy an arbitrary and discriminatory tax of 15% on all subscriptions and up to 30% on all other in-app purchases, amounting to hundreds of millions of dollars in inflated "fees," while monetizing the personal data of billions of digital app users. Google has a monopoly on the Google Play Store, which it is now abusing.

Q1FY22 Results:

• Growth in Topline: The company reported YoY growth of 19.63% in revenues to USD 798.63 million in Q1FY22 (ended March 31, 2022) compared to USD 667.61 million in Q1FY21, driven by 13.30% growth in Total payers complimented by favorable Revenue Per Payer (RPP).
• Increase in Net Income: MTCH witnessed an increase in net income to USD 180.53 million in Q1FY22 vs. USD 174.25 million in Q1FY21.
• Balance Sheet position: As of March 31, 2022, the company had a cash balance of USD 921.10 million with outstanding debt of USD 3.92 billion.

Key Risk:

• Competition Risk: The industry of relationship technology is competitive, with new services and entrants developing on a regular basis. Some of MTCH's rivals may have a competitive edge in certain geographic regions, user demographics, or other important areas that the firm already services or may serve in the future. These advantages may allow rivals to offer services that are more appealing to clients and potential users than MTCH's services, or to respond to new or changing opportunities more quickly and/or cost-effectively than the firm.

Outlook:

Financial Outlook (Shareholder Letter, Q1FY22, May 03, 2022)

Valuation Methodology: Price/Earnings Multiple Based Relative Valuation

(Analysis by Kalkine Group)

* % Premium/(Discount) is based on our assessment of the company's FY1 trading multiple after considering its key growth drivers, economic moat, stock's historical trading multiples versus peer average/median, and investment risks.

Stock Recommendation:

MTCH' stock price has fallen 46.82% in the past six months and is currently leaning towards the lower end of its 52-week range of USD 67.87 to USD 182.0. We have valued the stock using the Price/Earnings-based relative valuation methodology and arrived at a target price of USD 92.36.

Considering the significant correction in the stock price, solid margins, growth in total payers and RPP, growing market presence. We recommend a "Buy" rating on the stock at the current price of USD 75.73, up 5.33% as of May 19, 2022, 11:01 AM PDT.

Three-Year Technical Price Chart (as on May 19, 2022, at 11:01 AM PDT). Source: REFINITIV, Analysis by Kalkine Group

Technical Analysis Summary:

Technical Indicators Defined: -

Support: A level where-in the stock prices tend to find support if they are falling, and downtrend may take a pause backed by demand or buying interest.

Resistance: A level where-in the stock prices tend to find resistance when they are rising, and uptrend may take a pause due to profit booking or selling interest.

Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.

Note 1: The reference data in this report has been partly sourced from REFINITIV.  

Note 2: Investment decision should be made depending on the investors’ appetite on upside potential, risks, holding duration, and any previous holdings. Investors can consider exiting from the stock if the Target Price mentioned as per the Valuation has been achieved and subject to the factors discussed above. 

Note 3: The report publishing date is as per the Pacific Time Zone.

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