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Match Group Wins More Dating Subscribers Than Expected; Shares Gain

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Shares of Match Group rose 3.4% in extended market trading on Wednesday after the online dating service company’s 3Q subscriber base topped analysts' expectations.

Match Group's (MTCH) 3Q subscriber numbers rose to 10.8 million from 10.1 million in 2Q and 9.6 million in the year-ago quarter. Analysts had expected 10.5 million subscribers in 3Q. Match’s Tinder app also witnessed higher-than-expected subscribers of 6.6 million in 3Q, compared with analysts’ estimates of 6.47 million.

The dating company's 3Q earnings of $0.45 per share topped analysts’ estimates of $0.44 but declined 13% from the year-ago quarter. Its revenues of $640 million popped 18% year-over-year and came ahead of consensus estimate of $605.1 million.

Match Group said that “western market businesses have performed extremely well despite the COVID challenges, while some developing markets, several of which have been hard hit by the pandemic, are recovering more slowly.” (See MTCH stock analysis on TipRanks).

On Sept. 24, Jefferies analyst Brent Thill said that the online dating app usage declined a bit after surveying about 600 U.S. singles who intend to increase their spending when the environment normalizes. However, Thill said that 37% of paying users expect their spending on dating apps to increase in the coming months. The analyst maintained a Buy rating on the stock with a price target of $140 (8.8% upside potential), as he believes that the company would benefit from the trend as it owns four of the top six U.S. online dating brands.

Currently, the Street has a cautiously optimistic outlook on the stock. The Moderate Buy analyst consensus is based on 7 Buys and 4 Holds. The average price target of $129.09 implies that the shares are fully priced at current levels. Shares have increased by about 21.8% year-to-date.

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