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Match Group (MTCH) to Report Q2 Earnings: What's in Store?

Zacks Equity Research

Match Group, Inc. MTCH is set to report second-quarter 2019 results on Aug 6. Notably, the company surpassed the Zacks Consensus Estimate for earnings in the trailing four quarters, with an average positive earnings surprise of 20.2%.

Past-Quarter Performance

Match Group had delivered first-quarter 2019 adjusted earnings of 49 cents per share, which surpassed the Zacks Consensus Estimate of 33 cents.

Revenues of $464.6 million beat the Zacks Consensus Estimate of $464 million and improved 14% year over year. Excluding the effect of Foreign Exchange, the top line was up 18% year over year.

What to Expect in Q2

Match Group anticipates second-quarter 2019 revenues between $480 million and $490 million. Tinder remains the key catalyst

The Zacks Consensus Estimate for second-quarter earnings is pegged at 45 cents per share, unchanged for the last 30 days. The figure indicates growth of 9.8% from the year-ago reported figure. The Zacks Consensus Estimate for revenues stands at $488.6 million, suggesting an improvement of 16% from the year-ago quarter.

Match Group’s stock has gained 97.9% in a year, against the industry's decline of 16.6%.

Let’s see how things are shaping up prior to this announcement.

Factors at Play

Match Group is benefiting from increasing subscriber addition in the form of membership subscriptions. Total average subscribers in the first quarter came in at 8.6 million, surging 16% from the year-ago quarter. The Zacks Consensus Estimate is pegged at approximately 9 million for the second quarter, indicating an improvement of approximately 16.9% year over year.

Strong product portfolio comprising Tinder, Match.com, Meetic, PlentyOfFish and OkCupid are expected to aid Match Group's top line in the to-be-reported quarter. Tinder has been the key catalyst behind the company's year-over-year revenue growth. Direct revenues from Tinder grew 38% year over year in the last-reported quarter. Tinder’s average subscribers surged 36% year over year and came in at 4.7 million. The momentum is anticipated to aid the upcoming quarterly results.

Further, Match Group is leaving no stone unturned to capitalize on opportunities in India. The country is currently experiencing demographic dividend, wherein majority of the population is below 35 years of age. A burgeoning well educated middle class, increasing spending power and rapid adoption of smartphones are enhancing the company’s business prospects in th country.

In the first quarter, management noted that with initial levels of investment in India, OkCupid downloads soared 600% year over year in first quarter. Tinder and OkCupid dating apps are becoming increasingly popular among single millennials in the country. Management notes that migration of youngsters to bigger cities and lessening allegiance to arranged marriage are favoring growth prospects in India. This in turn is likely to aid the to-be-reported quarter’s results.

Growing Internet penetration in overall South-east Asia and impending launch of Tinder Lite are expected to be tailwinds.

What the Zacks Model Unveils

According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates if it also has a positive Earnings ESP. The Sell-rated stocks (Zacks Rank #4 or 5) are best avoided.

Match Grouphas a Zacks Rank #4 (Sell) and an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks to Consider

Here are some stocks which you may consider as our model shows that these have the right combination of elements to post an earnings beat in its upcoming release:

Lockheed Martin Corporation LMT has an Earnings ESP of +0.90% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

AmerisourceBergen Corporation ABC has an Earnings ESP of +0.82% and a Zacks Rank #3.

SeaWorld Entertainment SEAS has an Earnings ESP of +11.01% and a Zacks Rank #3.

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Match Group, Inc. (MTCH) : Free Stock Analysis Report
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