On Thursday, Match Group (NASDAQ:MTCH) experienced a boost in its stock price target, with a new goal set at $46.00, a slight increase from the previous $44.00. The adjustment was made while maintaining a Buy rating on the shares of the company, which is known for its online dating services.
The company reported that its second-quarter revenue grew by approximately 4% year-over-year, which was slightly higher than both the analyst's and consensus estimates. This growth was attributed to the performance of Hinge and the increase in Revenue Per Payer (RPP). Despite this positive outcome, the guidance for third-quarter revenue and adjusted operating income was about 2% and 3% below the consensus estimates, respectively.
Management has adjusted its full-year revenue growth expectations for 2024 to around 5%, which is down from the previously stated lower end of the 6-9% range. This revision takes into account the decision to exit live streaming services and the impact of foreign exchange rates.
In response to these developments, the analyst adjusted their estimates and set the new price target. The updated outlook is bolstered by the anticipation of 250,000 quarter-over-quarter net additions to Tinder's paid subscribers, which is seen as a positive sign given that Tinder's Monthly Active Users (MAUs) are stabilizing.
Match Group's stock price target increase reflects a cautiously optimistic view of the company's ability to continue growing its payer base and revenue, even as it faces some downward adjustments in its financial forecasts.
In other recent news, Match Group's second-quarter revenue increased by 4% year-over-year, reaching $864 million. This growth was driven by the performance of Hinge, which experienced a 48% surge in direct revenue to $134 million. Concurrently, Tinder's direct revenue grew by 1% to $480 million, and its payer base expanded by 8%.
RBC Capital recently raised its price target for Match Group from $33.00 to $47.00, maintaining an Outperform rating. This positive outlook is based on the company's recent performance and the potential for Tinder's payer growth to resume.
Match Group also announced plans to streamline operations, which includes a workforce reduction expected to produce annual cost savings of $13 million. The company aims to return at least 75% of its free cash flow to shareholders.
These developments follow Match Group's decision to exit live streaming services and the impact of foreign exchange rates, which led to a revised full-year revenue growth expectation of around 5%. Despite these adjustments, Match Group continues to show promising growth potential, as evidenced by the recent analyst upgrades and robust earnings results.
InvestingPro Insights
Match Group (NASDAQ:MTCH) has shown resilience with its stock price target being raised to $46.00, reflecting confidence in its growth prospects. InvestingPro data underscores this sentiment, revealing a P/E ratio of 14.61, which is attractive when paired with the company's near-term earnings growth.
This is further supported by a PEG ratio of 0.38, suggesting that the stock may be undervalued given its earnings growth potential. Additionally, the recent revenue growth of 4% year-over-year for Q2 2024 aligns with the company's overall performance, with a solid gross profit margin of 72.26% for the last twelve months as of Q2 2024.
InvestingPro Tips highlight the company's strategic financial management, with a perfect Piotroski Score of 9 indicating strong fiscal health. Furthermore, Match Group's management has been proactively buying back shares, a move that often signals confidence in the company's future performance.
It is worth noting that the company has also seen a significant return over the last week, month, and three months, with price total returns of 14.71%, 29.99%, and 22.32% respectively. These metrics provide a robust context for the raised price target, suggesting that Match Group may continue to present investment opportunities.
For those seeking more comprehensive analysis and additional insights, there are over 10 InvestingPro Tips available, which can be accessed for Match Group through the dedicated InvestingPro platform.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.