Raymond James maintains Match Group stock at Market Perform

On Wednesday, Raymond (NSE:RYMD) James analyst Andy Marok maintained a Market Perform rating on Match Group (NASDAQ:MTCH) following the company’s fourth-quarter results for 2024. With a market capitalization of $8.4 billion and trailing revenue of $3.49 billion, Match Group’s performance aligned with expectations, yet the forecasts for the first quarter and the full year of 2025 were revised downward. The adjustments were attributed to stronger currency exchange headwinds and comparisons to the previous leap year. According to InvestingPro data, the company maintains a perfect Piotroski Score of 9, indicating strong financial health.

The company’s flagship app, Tinder, continues to encounter challenges, particularly at the entry point of the user funnel. Although these issues slightly improved in January, user growth is expected to remain subdued throughout 2025. This is due to ongoing difficulties with iOS platform changes that have hampered user acquisition and reactivation. Additionally, the app is implementing trust and safety initiatives to eliminate malicious users, which may negatively impact headline figures but ultimately benefits the platform’s integrity. Despite these challenges, InvestingPro analysis shows Match Group trading at an attractive P/E ratio of 14.3x, with 6 additional ProTips available to subscribers.

Hinge, another application within Match Group’s portfolio, has shown consistent performance. The analyst’s perspective on Hinge remains largely unchanged as the app begins to focus more on monetization strategies in 2025. With an impressive gross profit margin of 72.44%, the company demonstrates strong operational efficiency. The Hinge user base is considered well-suited to support these changes due to the strong appeal of the brand and product.

Match Group also announced a significant leadership change with Spencer Rascoff, the former executive of Zillow (NASDAQ:ZG) and Hotwire, assuming the role of CEO. While the introduction of a new perspective is seen as positive, Marok noted that Rascoff is entering a challenging environment, which presents difficulties for any leader, regardless of their experience. Based on current metrics, InvestingPro’s Fair Value analysis suggests Match Group is currently undervalued. Discover comprehensive analysis and valuation insights in the Pro Research Report, available exclusively to InvestingPro subscribers.

In other recent news, Match Group’s Q4 earnings report revealed revenue of $860 million, slightly surpassing Wall Street’s expectations of $857 million. However, the company’s EBITDA fell short, logging $324 million against the projected $328 million due to rising operational costs. The company also announced the appointment of Spencer Rascoff as its new CEO, replacing Bernard Kim. Rascoff, known for co-founding Zillow, brings a wealth of experience to the role.

In terms of product development, Match Group’s initiatives, including the recently launched "First Impressions" feature, are proceeding as planned. BofA Securities maintained its Neutral rating on Match Group shares, despite the company’s EBITDA miss and a challenging foreign exchange environment. The firm also noted Match Group’s share repurchase activity in Q4 was limited due to the timing of their Investor Day, with the company planning to resume its share buyback program in Q1 2025.

While these are recent developments, Match Group’s Q1 and full-year 2025 revenue guidance fell below analyst expectations, attributing the forecast to foreign exchange headwinds and the exit from some live streaming services. Despite these setbacks, BofA Securities’ stance on Match Group remains unchanged.

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