Tinder Expected To Help Match Group Swipe Right To Growth

While Tinder would likely remain Match Group Inc’s (NASDAQ: MTCH) growth driver, turnaround at the Legacy and Affinity properties is expected to continue, SunTrust Robinson Humphrey’s Robert S. Peck said in a report. He maintained a Buy rating on the company, while raising the price target from $18 to $20.

Analyst Peck mentioned the following in his Q3 earnings preview:

• Continued growth in paid member counts, led by Tinder, PlentyOfFish, and the ongoing turnaround at Match.
• Margin expansion on a y/y basis for dating and non-dating to ~34 percent, even with an increase in costs and a shift of expenses from Q2 to Q3.
• Continued improvement of mobile conversion strengthening turnaround story of legacy sites.
• Potentially ongoing currency headwinds impacting a quarter of revenues, mostly denominated in Euro and Pound, “which we do not believe the company hedges for,” Peck noted.

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Tinder Driving Growth

The analyst highlighted, “For both iOS and Android, Tinder is the clear leader in terms of overall downloads and interest.” He added that Tinder had “maintained, if not expanded,” its lead among online dating apps.

“We expect to see robust net adds to paid member counts (PMCs) both domestically and internationally driven primarily by Tinder. This should contribute to solid revenue growth, based on our projected average revenue per paying user (ARPPU),” Peck further stated.

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