Wolfe Research reiterated an Outperform rating and $41.00 price target on Match Group (NASDAQ: NASDAQ:MTCH) shares. The analyst pointed to several factors that underpin their positive outlook: a low revenue growth trajectory, a healthy FCF profile, the potential for aggressive stock buybacks, and a stronger focus on cost structure which is expected to significantly boost margins in the coming years.
InvestingPro data confirms management's commitment to shareholder returns through aggressive share buybacks, with the company maintaining strong liquidity ratios and generating substantial free cash flow. Given these factors, along with the current valuation metrics, Wolfe Research views Match Group as a compelling investment opportunity.
The firm believes that the recent pullback in Match Group's shares presents a buying opportunity. The analyst expressed confidence in the company's ability to demonstrate effective execution over the next 3-4 quarters. If the company fails to show sustainable improvement, there is a possibility that Match Group could be taken private at a more reasonable valuation. Conversely, if trends improve, the analyst anticipates a likely re-rating of the shares.
In other recent news, Match Group, the online dating giant, has seen several adjustments to its financial outlook following mixed results in the third quarter. KeyBanc Capital Markets adjusted its price target on the company's stock to $43.00, Barclays (LON:BARC) to $53.00, Goldman Sachs to $40.00, and Truist Securities to $35.00.
Despite a decrease in users and payers at Tinder, Match Group's flagship app, the company's Q3 revenue and EBITDA figures aligned with market consensus and the company effectively managed costs.
The company's Q4 revenue expectations range between $865 million and $875 million, with a decrease anticipated for Tinder's revenue. However, Hinge, another app in Match Group's portfolio, has shown robust growth, with a 36% increase in revenue to $145 million. These recent developments have led to analysts from Goldman Sachs and Truist Securities expressing potential improvements in Tinder's performance towards the second half of 2025.
Match Group is focusing on enhancing Tinder's user experience and ecosystem, with further insights on upcoming product innovations and revenue growth potential expected to be shared during the Investor Day in December 2024.
The company also plans to return at least 75% of free cash flow to shareholders. These recent developments provide investors with a comprehensive view of the company's recent financial performance and strategic direction.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.