Is Match Group Stock Worth Buying?

woman in red jacket holding white smartphone

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Based in Dallas, Texas, Match Group, Inc. (MTCH) provides dating products worldwide. The company pioneered the concept of online dating over 20 years ago. Its portfolio of brands includes Tinder, Match, Meetic, OkCupid, Hinge, Pairs, PlentyofFish, and OurTime. MTCH’s products are available in more than 40 languages to users worldwide.

Although the company received a minor setback with the onset of the global COVID-19 pandemic, its recovery began in May and has continued since with positive growth in its subscriber totals. Average subscribers increased 12.3% year-over-year to 10.8 million for the third quarter (ended Sept. 30, 2020). Its Average Revenue per Subscriber (ARPU) also increased 5% year-over-year to $0.62.

The company’s success with Tinder is well documented. It is ranked #1 in downloaded dating apps worldwide. MTCH’s non-Tinder portfolio has also showed promising results. The stock has gained more than 49% over the past three months to close Thursday, Dec. 24's trading session at $153.39.

A portfolio of products that target various demographics and a potential upside based on several factors have helped the stock earn a “Strong Buy” rating in our proprietary rating system. Here is how our proprietary POWR Ratings system evaluates MTCH:

Trade Grade: A

MTCH has recently been trading significantly above its 50-day and 200-day moving averages of $140.92 and $113.67, respectively, indicating an uptrend. Moreover, MTCH has gained 11% over the past month, reflecting a short-term bullishness. MTCH shares were trading at $152.75 per share on Thursday morning, down $0.64 (-0.42%). Year-to-date, MTCH has gained 44.55%, versus a 16.61% rise in the benchmark S&P 500 index during the same period.

The company’s top line has increased more than 18% year-over-year to $639.8 million for the third quarter ended Sept. 30, 2020. Operating income has increased 14.2% year-over-year to $200.2 million. Total direct revenue, which accounted for nearly 98% of total revenue, increased 18.3% year-over-year to $628.3 million. While Tinder direct revenue increased 15% year-over-year, non-Tinder brands collectively increased direct revenue by 23%, driven by growth in ARPU.

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