Match Group (MTCH), the company behind popular online dating apps like Tinder, has been in a rough patch for a while now. The online dating giant relies heavily on Tinder for more than 50% of its revenue and has experienced slowing growth at its flagship app. This drag has weighed on MTCH stock, which has declined by more than 10% year-to-date. Last week, the company’s Investor Day failed to enthuse Wall Street analysts.
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MTCH’s Investor Day Falls Short of Expectations
Match’s Investor Day was meant to rekindle investor interest, but it missed the mark. The company unveiled long-term revenue targets through 2027, expecting revenues to grow at a compounded annual growth rate (CAGR) of 4% to 6% between 2024 and 2027. Additionally, it anticipates its adjusted operating income (AOI) margin will expand by 300 basis points from 2025 to 2027. These long-term targets were in line with analysts’ expectations.
However, Match forecasted a low single-digit decline in Tinder’s revenue next year, falling short of Wall Street’s estimates of 2% growth. MTCH also announced a $1.5 billion stock buyback program and its first quarterly dividend of $0.19 per share.
MTCH’s Tinder Is Facing Challenges
Tinder, with its 47 million monthly active users, remains Match’s flagship app but continues to face challenges. The app has long struggled with a reputation as a hookup tool and issues with fake accounts. Match has been working to change this perception among users.
Tinder CEO Faye Iosotaluno noted, “The perception that Tinder is mainly for hookups has decreased 12 percentage points in the U.S. and the U.K. since our brand work began two years ago.”
While the company is planning improvements such as biometric verification, AI-enhanced matchmaking, and a “double-dating” feature, Iosotaluno acknowledged that “these turnarounds take time.”
Morgan Stanley Lowers Price Target on MTCH
Following the Investor Day, Morgan Stanley analyst Nathan Feather maintained a Hold rating but lowered the price target to $31 from $33. Feather commented that he found the “[Tinder] product vision compelling, but it will need to be paired with strong execution.”
The analyst’s price target implies a downside potential of 1.4% from current levels.
Is MTCH a Good Stock to Buy?
Analysts remain cautiously optimistic about MTCH stock, with a Moderate Buy consensus rating based on 11 Buys, and eight Holds. The average MTCH price target of $38.06 implies an upside potential of 21% from current levels.
