2023-08-02 08:18:21 ET
Match ( NASDAQ: MTCH ) shares rose nearly 10% in pre-market trading on Wednesday after the online dating company reported second-quarter results that topped expectations, prompting investment firm BTIG to upgrade the stock.
Analyst Jake Fuller raised his rating on Match ( MTCH ) shares to buy from neutral and put a $60 price target, pointing out that the net addition outlook for Tinder is improving, while growth is accelerating.
"With Tinder opting not to go ahead with international price increases and showing an improving daily new users/reactivation trend, the net add outlook is improving and that has been a drag on sentiment," Fuller wrote in an investor note. "We bring estimates up with a view that Tinder is through the worst, issues were execution-related not category saturation and that the new team looks to be on the right track."
For the second-quarter, Match ( MTCH ), which owns Match.com, OKCupid, Tinder and several other dating networks, earned 48 cents per share as revenue rose 4.4% year-over-year to $829.55M.
Included in that was a 6% bump from Tinder Direct Revenue, whereas other brands collectively rose 3%, or 5% on a foreign currency neutral basis.
Looking ahead, Match ( MTCH ) expects revenue at Tinder to grow 10% and between 8% and 9% for the whole company. Fuller said that the outlook for net additions for Tinder "appears to be firming" as the company foregoes international price increases.
"Focus is now shifting to product innovation, which will be the key to sustaining growth," Fuller added.
Analysts are largely bullish on Match Group ( MTCH ). It has a BUY rating from Seeking Alpha authors , while Wall Street analysts rate it a BUY . Conversely, Seeking Alpha's quant system, which consistently beats the market, rates MTCH a HOLD .
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Match pops on BTIG upgrade, Q2 results show Tinder may be 'through the worst'