Match Group, Incorporated (NASDAQ: MTCH) expects to raise $433 million in its upcoming IPO. Based in Dallas, Texas, Match Group provides dating products worldwide across a wide variety of websites, including Match.com.

We previewed MTCH on our IPO Insights platform.

Match Group will offer 33.3 million shares at an expected price of $12 to $14. If the underwriters price the IPO at the midpoint of that range, Match Group will have a market capitalization of $3.1 billion.

Match Group filed for the IPO on October 16, 2015.

Lead Underwriters: Allen & Co., BofA Merrill Lynch, and J.P. Morgan Securities

Underwriters: Barclays Capital, BMO Capital Markets, BNP Paribas Securities, Cowen & Co., Deutsche Bank Securities, Fifth Third Securities, Oppenheimer & Co., PNC Capital Markets, and SG Americas Securities

Business Summary: Provider of Dating Websites and Products

(click to enlarge)

(https://gotinder.com/)

Match Group provides dating products through its websites, and it operates and maintains approximately 45 brand names, such as Match.com, OkCupid, PlentyOfFish, OurTime, Tinder, Twoo, Meetic, SingleParentMeet, PetPeopleMeet, SpeedDate, LoveandSeek, and more. It websites encompass 38 languages across 190 countries. The company also provides various test preparation, college counseling, and academic tutoring services.

Match Group currently has an estimated 59 million monthly active users (MAU) and approximately 4.7 million paid members through the quarter ended September 30, 2015.

The average paying user spent over $200 last year, which resulted in $800 million in revenue for Match in 2014. The company reached an 87 percent gross margin and a 24 percent operating profit margin. However, the company holds approximately $50 million in cash and cash equivalents versus long-term debt of around $1.29 billion.

Match Group is a spinoff of IAC/InterActiveCorp, and it currently has approximately 4,800 employees. The company intends to use the proceeds of the IPO to repay party-related indebtedness issued to IAC after the determination of the IPO price, but prior to the closing of the deal.

Executive Management Highlights

CEO Sam Yagan is a co-founder of OkCupid. His previous entrepreneurial experience comes from SparkNotes and eDonkey. In addition, he co-founded TechStars Chicago and Corazon Capital. He holds a Bachelor's in Applied Mathematics and Economics from Harvard College and an MBA from the Stanford Graduate School of Business.

CFO Gary Swidler has served Match Group since August 2015. He has 18 years of experience with Bank of America Merrill Lynch and its predecessors serving in a variety of capacities. Prior to joining Merrill Lynch & Co., Mr. Swidler was an associate at the law firm Wachtell, Lipton, Rosen & Katz. He graduated with a Bachelor of Science in Economics from the Wharton School of the University of Pennsylvania and with a JD from New York University School of Law.

Potential Competition: eHarmony, Spark Networks, ElitePartner, and Badoo

The online dating industry is highly competitive, and rivals to Match include eHarmony, Spark Networks (NYSEMKT:LOV) (ChristianMingle, Jdate), Parship, Zoosk, ElitePartner, e-Darling and Badoo. In addition, the company notes that it competes indirectly with offline dating services, including in-person matchmakers, and social media platforms. Moreover, Match states in its SEC filings that the traditional methods of meeting potential companions are its biggest competition.

Financial Overview: Impressive Growth

Match Group provided the following figures from its financial documents for the nine months ended September 30:

As of September 30, 2015:

Conclusion: Strongly Consider An Allocation

It will be very interesting to see how the market prices MTCH; in an approximate market size of single adults with access to the internet (511 million potential users), MTCH has captured 59 million (11%) and continues to grow.

Stated risks include MTCH operating in a competitive industry, along with coordinating its many products, which monetize users at different rates in different countries.

Overall, we are keen on this unique and fun business and strongly suggest investors consider an allocation. Stay tuned as the deal develops, and the market responds to the tragic events of the past weekend in Paris.

This article covers one or more stocks trading at less than $1 per share and/or with less than a $100 million market cap. Please be aware of the risks associated with these stocks.