Analysts at Oppenheimer have downgraded their rating of Match Group (NASDAQ:MTCH) Inc, a leader in digital dating products whose portfolio includes Match, OkCupid, Tinder, PlentyOfFish, and Hinge, to “Perform” after it reported its first-ever quarterly decline in 4Q yesterday.
The analysts also removed their $65 price target for the stock but did not provide an updated price target, stating the downgrade was while they waited for its Tinder product to stabilize after a significant loss in subscriptions during the quarter.
Match Group (NASDAQ:MTCH)’s shares were trading lower on Thursday morning, down 1.1% at US$50.86.
READ: Match Group expects lower 1Q revenue as more dating app users are standing-up Tinder
“While MTCH unveiled an encouraging product roadmap and evidence of improved à la carte revenue, the stock is now a ‘show me story’ after losing a record number of paid subs (around 500,000), stoking bear concerns that US/Europe online dating is maturing,” the analysts wrote in a note to clients.
They noted management’s suggestion that dating was not recession-resistant being exposed to younger consumers with less discretionary spending.
“While management attributed 268K Tinder sub loss to the removal of lower-priced tiers, the strategy requires changing focus away from ‘freemium’ to ‘premium’ via large paid marketing campaigns, indicates a maturing business that has passed peak margins,” the analysts wrote.
Oppenheimer’s analysts added that, while Meta Platforms Inc (NASDAQ:FB) entered the market with its dating application Facebook Dating in 2022, they were yet to see an adverse impact on Match.
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