Why This Match Group Analyst Is Swiping Right

Match Group Inc MTCH reported strong first-quarter results, despite headwinds. However, management guided to second-quarter revenue growth of 4%-5%, below Street expectations, and projected fiscal 2022 revenue growth towards the lower end of the previous guidance range of 15%-20%, with the outlook being impacted by currency exchange rates, the macro environment and app store policy changes, according to Wells Fargo.

The Match Group Analyst: Brian Fitzgerald upgraded the rating for Match Group from Equal Weight to Overweight, while lowering the price target from $140 to $115.

The Match Group Thesis: The pending CEO change adds to the uncertainty, though “we view incoming CEO Bernard Kim as a strong addition,” Fitzgerald said in the upgrade note.

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“On a positive note, MTCH for the first time disclosed companywide MAU, pushing back on recent bear thesis (fueled by third-party app data of questionable accuracy) on declining user engagement,” the analyst wrote.

“While we expect crosswinds to continue (likely for multiple quarters), we view fundamental opportunity as very much intact and valuation as compelling at current levels,” he added.

MTCH Price Action: Shares of Match Group had declined by 4.53% to $70.72 at the time of publication Monday, according to Benzinga Pro.