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On Wednesday, Morgan Stanley (NYSE:MS) set a new price target for Match Group (NASDAQ:MTCH) shares, raising it slightly from $32.00 to $33.00 while keeping the stock’s rating at Equalweight. The adjustment followed Match Group’s fourth-quarter earnings report, which seemed to generate a cautiously optimistic view from the analysts. According to InvestingPro data, the company appears undervalued, with strong fundamentals including a perfect Piotroski Score of 9 and an attractive PEG ratio of 0.53.
The commentary from Morgan Stanley highlighted that although it might be premature to declare a definitive turnaround, the recent performance of Tinder’s monthly active users (MAU) could indicate a positive direction for the company. Specifically, Tinder’s MAU decline slowed to an 8% year-over-year rate at the end of the period, suggesting potential for the company’s bull case scenario. The company maintains robust operational efficiency with a 72.44% gross profit margin and healthy liquidity metrics.
Despite this possible upside, the analyst suggested that Match Group’s stock is likely to stay within a certain trading range in the near term. This projection is based on the company’s free cash flow (FCF) yield, which is expected to hover between 7% and 13% until Match Group can demonstrate consistent and sustainable growth.
The statement from Morgan Stanley concludes with a reaffirmation of the Equalweight rating and the new $33 price target, emphasizing a stance of watchful optimism as the market awaits clearer signs of Match Group’s growth trajectory.
In other recent news, Match Group, the owner of popular dating apps like Tinder and Hinge, reported fourth-quarter results with an adjusted earnings per share of $0.59 and revenue of $860 million. These figures surpassed analyst estimates, but the company’s guidance for the upcoming quarter and full year fell short of Wall Street projections. Raymond (NSE:RYMD) James and BofA Securities maintained their Market Perform and Neutral ratings on Match Group respectively, despite the company’s revised forecasts for the first quarter and the full year of 2025 due to stronger currency exchange headwinds and comparisons to the previous leap year.
Match Group also announced the appointment of Spencer Rascoff, the former executive of Zillow (NASDAQ:ZG) and Hotwire, as its new CEO. This significant leadership change is seen as introducing a fresh perspective, although Rascoff is expected to face a challenging environment. Match Group’s applications, Tinder and Hinge, continue to implement strategies focused on user growth and monetization, with Hinge showing consistent performance and Tinder experiencing challenges due to iOS platform changes.
The company also disclosed that it anticipates resuming its share buyback program in the first quarter of 2025. However, the company’s share repurchase activity in the fourth quarter was affected by the timing of their Investor Day, with only $117 million in buybacks compared to $243 million in the previous quarter. These are among the recent developments in Match Group’s operations and leadership.
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