Match Group Inc. jumped 17% pre-market after reporting second-quarter earnings that beat the highest estimates.
The shares traded around $86 and are on pace to open at a record high. Analysts agree that Tinder continues to drive growth at the online dating company and many see further opportunities for growth, especially in international markets.
Jefferies, Brent Thill
Second quarter results “underscore our belief that Tinder monetization is still early” with 5.2 million paid subscribers versus ~600 million global singles.
Match “provides a unique balance of ongoing industry tailwinds” along with a team that is experienced at building online dating products. Tinder has “significant scale/resource advantage at this point that will be difficult to crack.”
“International continues to fuel growth” but non-Tinder brands were down 3% in the quarter and Match will need other brands to contribute in order to sustain multiple years of growth.
Maintains buy and $80 price target.
Deutsche Bank, Kunal Madhukar
“Match has historically been conservative in its outlook, which it has consistently beaten. This quarter was no different.”
“As comps get easier in the back half and with third quarter seasonally stronger for Tinder, we are not surprised the company guided to showing meaningful acceleration in revenue and Ebitda growth versus first half.”
Maintains hold rating.
Cowen, John Blackledge
Tinder delivered a “blowout” quarter with net subscriber adds of 503,000 quarter-over-quarter to 5.2 million versus management guidance of 401,000 net additions.
Third quarter revenue guidance of $535 million to $545 million is well above consensus estimates of $521 million and management expects continued subscriber momentum at Tinder.
“Despite a number of discretionary long-term orientated investments the balance sheet remains strong at 1.9 times net leverage.”
Maintains outperform and $84 price target.
SunTrust, Youssef Squali
“Match Group reported better than expected revenues despite tough FX headwinds that lowered year-over-year growth” as higher than expected subscriber numbers drove top-line.
Tinder growth accelerated to about 39% in the second-quarter from about 36% in the first-quarter through a better recommendation engine, enhancements to the paywall and pricing and better Tinder Gold merchandising.
Non-Tinder subscribers have seemed to find some “stabilization as subscribers remained relatively flat as OKCupid and Match continue to gain traction.”
Maintains hold and $62 price target. More details to follow Wednesday’s earnings call at 8:30 a.m.