Hinge and Tinder Can Offer Upside for Match Groups with Product Catalysts

© Stocksak. Hinge and Tinder Can Provide Upside for Match Group – Jefferies

By Sam Boughedda

Jefferies analysts assumed coverage on Match Group (NASDAQ 🙂 with a Buy Rating and a $60 target share price. Bumble Inc (NASDAQ:), with a Hold rating and $23 target share price on Wednesday.

In a note, analysts said that there is no recession in love and that Match is the preferred choice. This is because Match’s product catalysts at Tinder and Hinge can provide upside to investors’ low expectations for revenue growth.

They stated that MTCH is more likely see positive est revs than BMBL, which may see negative revisions. MTCH’s 2H22 guidance at 0% y/y revision growth seems very conservative. It sets a low bar in FY23 rev guidance. Investors are likely to only be looking for single digit growth, and not historical high teens. With BMBL, however, investors are looking for >2x higher rev growth in FY23 (est. 23% vs. MTCH’s 10%, leaving more room to negative revision risk. We prefer MTCH’s more conservative approach to guidance, especially when we face a more challenging macro backdrop.

The analysts believe Match also has more catalysts to accelerate rev growth over 2-3 years.

Based on our analysis of Hinge’s upcoming 2-tier subscription we believe there could be $100-150M upside to the street’s FY23 Hinge est or 3-4% upside for total rev. Hinge’s global acceleration int’l rollout (2 markets/qtr vs prior 1/qtr), is already driving an acceleration of global downloads. Tinder (56% of rev growth) will benefit from a new subscription level and a paid product that is female-focused. We believe FY22 should be the low point in MTCH rev growth (est. +7%) and a 13% fwd cAGR (’22-25),” they concluded.

Match shares are down more than 2% on Wednesday, while Bumble is down 2.5% as of this writing.

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