Wolfe Research maintains $40 target on Match Group stock

On Tuesday, Wolfe Research reiterated its optimistic stance on Match Group (NASDAQ:MTCH) shares, maintaining an Outperform rating and a $40.00 price target. According to InvestingPro analysis, Match Group appears undervalued at its current price of $35.99, with strong fundamentals supported by a perfect Piotroski Score of 9 and a "GREAT" financial health rating. The research firm’s analyst highlighted the significance of effective execution following Match Group’s investor day in December, as the company’s CEO is up for re-election and three activist investors are closely monitoring the company’s performance.

The analyst at Wolfe Research believes that the financial forecasts for the fourth quarter and the year 2025 have been largely accounted for in the company’s recently updated guidance. They noted that since activist investors became involved over the past year, growth rate expectations have been adjusted downward. The company maintains solid performance with 6.12% revenue growth and an attractive P/E ratio of 15.3x. Additionally, the current higher interest rates are anticipated to persist. Want deeper insights? InvestingPro subscribers have access to over 30 additional premium insights and metrics for Match Group.

Wolfe Research’s positive outlook on Match Group is partly based on the premise that an improvement in the company’s fundamentals could lead to a revaluation of the shares. Conversely, if the company does not demonstrate improvement, there is a possibility that it could be taken private.

The firm’s valuation analysis assumes a purchase price of 11 times the projected 2025 EBITDA, compared to the current multiple of 9.5 times. This includes a leverage factor of 4 times. Wolfe Research also factors in a 4% compound annual growth rate (CAGR) for top-line revenue over five years, an interest rate of 5.5% on a revised capital structure, and an increase in EBITDA margins reaching into the low-40% range by 2030, with a 75% free cash flow (FCF) conversion rate.

From this analysis, Wolfe Research estimates a share price range of $40 to $45, with a 10 times terminal multiple by the year 2030, a multiple on invested capital (MOIC) of 2.2 times, and an internal rate of return (IRR) of 14%. The firm’s projections do not account for any further divestitures by Match Group.

In other recent news, Stifel’s recent analysis of e-commerce companies heading into their Q4 earnings showed a positive outlook, particularly for Amazon (NASDAQ:AMZN), Cart.com, and Life360. The firm’s analysis indicated improved e-commerce growth in Q4, exceeding initial expectations. Stifel gave Amazon, Cart.com, and Life360 ’Buy’ ratings, despite recognizing potential risks to Amazon’s Q1 guidance.

In contrast, Match Group Inc . received a revised outlook from S&P Global Ratings from positive to stable due to the weak performance of its leading brand, Tinder. Tinder’s low Monthly Active Users (MAU) and a decrease in paying customers have impacted Match’s revenue and EBITDA. S&P Global Ratings now expects Match to increase its revenue by 3%-5% in 2026.

Furthermore, Jefferies downgraded Match Group’s stock from Buy to Hold and reduced the price target to $32 due to declining MAUs on Tinder. New Street Research also adjusted its stance on Match Group, shifting the rating from Buy to Neutral, citing concerns over Tinder’s monetization challenges.

Despite these concerns, Deutsche Bank (ETR:DBKGn) maintained a Buy rating on Match Group with a price target of $38.00, highlighting the company’s strong AI-driven product innovation pipeline and optimistic margin forecast. This recent news provides investors with a comprehensive look at the current developments in these companies.

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