Match Group Inc (NASDAQ:MTCH) has earned a repeat ‘Perform’ rating from Oppenheimer following its investor day, where the dating app company set “lofty goals,” the analysts believe.
The Tinder, Hinge, OkCupid and PlentyOfFish parent company told investors it believes it can consolidate costs within its portfolio of apps but outlined an ambitious margin target.
“The 2027 margin target appears aggressive in our view, in the context of flat Tinder margins despite continued revenue declines, margin expansion in evergreen and emerging markets while revenue declines and corporate expenses declining about 20% in 2027,” analysts wrote.
“We also believe investors were not convinced that Tinder can return to growth after 2025.”
They described Match’s outlook for Tinder for a low single digit revenue decline in 2025 versus Street expectations revenue will be flat year-over-year as disappointing.
“The presentation highlighted focus on improving matching through AI-driven improvements, but too early to know if this will be successful,” they wrote.
“We believe best-case investors should assume Tinder Payers remain flat. Furthermore, flat margins on declining revenue may prove challenging given AI investments.”
Analysts see Hinge as a bright spot, noting the presentation from Hinge’s CEO was impressive, highlighting matching sophistication and a 44% female audience.
“We see the 2027 targets of $1 billion in revenue/35% margin via geographical expansion as achievable,” they wrote.
“However, over time, we expect Hinge growth slows as it reaches full penetration. Additionally, management does not expect to ever reach Tinder margins, as Tinder benefited from first mover network effects.”
Oppenheimer did not award Match a price target. Shares of Match traded hands at $31 at noon on Friday, having shed about 15% so far in 2024.
“While sum-of-the-parts implies $33 to $42, we have low conviction without more supportive data points,” analysts concluded.