Match Group (MTCH) - ★★
Ranked #74 in Q3 2024 SMID Cap Equity Rankings
Match Group (MTCH) stock soared 12% during intraday trading on Wednesday, reaching approximately $37 per share. This surge comes on the heels of the company's latest quarterly results, which revealed encouraging signs of progress at its flagship app, Tinder.
The stock's performance has significantly exceeded our earlier projections. Earlier this month, we issued a note indicating a twelve-month price target of $34 for MTCH, when the stock was trading at $30. With today's 12% gain, the stock is now trading around $37, representing an impressive 20%+ increase since our initial assessment.
Key Highlights from Match Group's Latest Results:
Tinder's Performance: While Tinder saw a decline in paying users, it managed to increase revenue per payer. Monthly active users decreased by 9% year-over-year in the second quarter, matching the previous quarter's decline. However, the company views this stabilization as a crucial indicator of improved performance.
Positive Outlook: Match Group expressed optimism for the current quarter, anticipating strong sequential additions of paying users. Gary Swidler, the company's Chief Financial Officer, shared expectations for Tinder to add approximately 250,000 paying users sequentially in the third quarter. This growth would mark the end of five consecutive quarters of declining payers for Tinder.
Year-over-Year Comparison: Despite the projected sequential growth, Swidler noted that payers are still expected to decline around 5% year-over-year in the current quarter.
The market's enthusiastic response to these results suggests renewed confidence in Match Group's ability to navigate challenges and capitalize on growth opportunities in the online dating space. As the company continues to focus on improving its core offerings and expanding its user base, investors will be closely watching for sustained positive trends in the coming quarters.
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