Barclays cuts Match Group target to $52, maintains overweight

On Wednesday, Barclays (LON:BARC) analyst Ross Sandler adjusted the price target for Match Group (NASDAQ:MTCH) shares, reducing it slightly to $52 from the previous target of $53, while continuing to recommend the stock with an Overweight rating. The adjustment follows Match Group’s recent financial report, which showed revenue figures meeting expectations, although earnings before interest, taxes, depreciation, and amortization (EBITDA) and the number of Tinder subscribers fell short of projections. According to InvestingPro data, Match Group maintains strong fundamentals with a perfect Piotroski Score of 9 and an impressive gross profit margin of 72.44%.

Sandler noted that the appointment of Spencer Rascoff, known for his growth-focused approach, could positively influence Match Group’s trajectory. Rascoff’s experience with Zillow Group (NASDAQ:ZG) is seen as particularly relevant due to the similarities between the two companies’ market dominance and history of strategic mergers and acquisitions. However, Sandler also pointed out that not all of Zillow’s initiatives, such as the iBuyer program, were executed flawlessly. The company’s solid financial position, with current assets exceeding short-term obligations by 2.49x, provides a strong foundation for new leadership initiatives.

Despite the modest shortfall in EBITDA and Tinder’s subscriber count, Match Group has largely maintained its guidance for 2025, taking into account the slightly negative impact of foreign exchange rates and the Tinder subscriber metrics. Sandler expressed a cautious optimism for the company’s future, especially considering the involvement of multiple activist investors who are likely to apply pressure on the new CEO to perform. InvestingPro analysis suggests the stock is currently undervalued, with additional insights and detailed valuation metrics available in the comprehensive Pro Research Report, which covers over 1,400 US stocks.

The online dating sector continues to face secular challenges, but Sandler believes that innovative offerings such as "AI-enabled discovery" could herald a new phase for dating applications, provided they are implemented effectively. With Match Group’s stock trading at 14.3 times earnings and showing a healthy PEG ratio of 0.53, Sandler suggests that investors have a margin of safety as they anticipate a more consistent performance from the company.

In other recent news, Match Group has seen a flurry of activity with earnings reports, analyst updates, and executive changes. The company’s Q4 earnings report showed an adjusted earnings per share of $0.59 and revenue of $860 million, slightly surpassing expectations. However, the outlook for the first quarter and full year of 2025 fell short of projections, with revenue expected to be between $820 million and $830 million for the first quarter, and between $3.375 billion and $3.5 billion for the full year.

Morgan Stanley (NYSE:MS) has raised Match Group’s price target to $33, maintaining an Equalweight rating. The firm noted that while Tinder’s monthly active users’ decline has slowed, the stock is expected to stay within a certain trading range in the near term. Meanwhile, Raymond (NSE:RYMD) James maintained a Market Perform rating, citing challenges for Tinder and a consistent performance for Hinge. BofA Securities kept a Neutral rating with a steady price target of $36, acknowledging the company’s Q4 revenue and EBITDA results.

Match Group also announced the appointment of Spencer Rascoff as the new CEO, replacing Bernard Kim. Rascoff, known for co-founding Zillow and other startups, has been on Match Group’s board since March 2024. These developments reflect the recent shifts and expectations around Match Group’s performance and leadership.

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