Tinder logo seen displayed on a smartphone.
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Match Group, the parent company company of dating apps Tinder and Hinge, is trading at its lowest price since it spun out into a separate company from IAC in July 2020. The stock is down more than 16% to about $29 per share.
Match, which reported third-quarter earnings on Tuesday, beat analysts’ estimates provided by LSEG, posting $881.6 million in revenue versus $880.6 million expected, and earnings of 57 cents per share, three cents above expectations.
Analysts expressed concern about lower fourth-quarter revenue projections and a falling number of people paying for Tinder.
JPMorgan analysts called the third quarter results “solid” and said the biggest surprise came in the projections for fourth-quarter revenue, which Match said would come in between $855 million and $865 million. That’s considerably lower than the consensus estimates of more than $890 million.
“The 4Q outlook was the biggest surprise, and in our view why MTCH shares are trading down, with the revenue guide of $855-865M well below the Street at $894M,” wrote analysts at JPMorgan on Tuesday.
People paying for Tinder fell 6% in comparison to the same period a year ago, which Baird Equity Research analysts said will likely be a factor in how the company is evaluated.
“Beyond the guide, we suspect a key area of scrutiny will be around trends in Tinder payers. This metric was down 6% y/ y in 3Q (in line with guidance) – but MTCH called out a ~200K sequential headwind in 4Q as weekly subscribers churn out of the system.”
Match also announced that it settled its lawsuit with Google, meaning the $40 million in escrow will be returned to Match and it will not owe Google any more money. Match also agreed to use Google’s User Choice Billing by March 31, 2024, which will oblige match to Pay a cut of subscription fees to Google.
“We believe this will likely include advantageous app store position for Match apps which could drive downloads higher for several quarters, similar to what we saw when Bumble was similarly added to the program,” said Deutsche Bank analysts in a note to investors.
