Match Group Turns In Strong Quarter With Tinder, Overseas Success

Match Group, Inc. MTCH had an attractive-looking quarter, but analysts weren’t quite ready to swipe right.

Match had a solid beat with positive Tinder trends driving top-line year over year growth of 18%. Tinder use growth was up by 46% over the same quarter last year as customers responded to product improvements.

The stock jumped Wednesday from $73 per share to $93 per share, but was trading lower on Thursday, and a couple of analysts stayed on or moved to the sidelines on the stock, saying the price has caught up to the potential. The ambivalence came even as several on the sell-side boosted price targets dramatically to match the company’s continued guidance optimism.

The Analysts

UBS analyst Eric Sheridan downgraded the stock from Buy to Neutral, while raising the target price from $77 to $95.

Bank of America’s Nat Schindler reiterated a Buy rating while boosting the price target from $85 to $102.

Wells Fargo’s Robert Coolbrith boosted his price target from $70 to $90, and maintained a Market Perform rating.

Nomura Instinet’s Mark Kelley remained Neutral on the stock but increased the target price from $62 to $81.

See Also: IAC CEO Says Match Group Can 'Stand On Its Own'

The Theses

Sheridan acknowledged Match’s strong quarter, saying the company has dispelled bear narratives on how long it can continue to see user growth. It’s also clearly become the category winner, he said.

“However, looking forward, we now believe that almost all of the call optionality (Tinder user growth, pricing power, a non-Tinder recovery) seem solidly priced in at current levels,” Sheridan wrote in a note. Kelley said the same.

“While this was an impressive quarter with nothing to pick at, valuation leaves us on the sidelines at current levels,” Kelley wrote.

International Strength

But Schindler wasn’t quite ready to reject Match, noting Tinder’s 503,000 net subscriber additions were its second-highest ever, and were pushed up by international growth.

“We see efforts in Asia bearing fruit, with Pairs and Tinder overtaking local competitors’ app downloads in Japan," Schindler wrote, noting that those two Match apps now are the top two in the Japanese market. He also cited the acquisition of Harmonica, an Egyptian dating startup recently acquired by Match as it seeks to expand into Muslim markets.

Coolbrith noted strong momentum also exists in India with another Match brand, OKCupid.

Coolbrith, however, also liked the last date, but wasn’t necessarily ready for another.

“While execution remains strong and Match faces significant opportunity ahead … we see valuation as fair with the stock up 24% following 2Q results,” he wrote in a note.

Price Action

Shares of Match Group were down 4.4% at $87.75 Thursday afternoon.