Please ensure Javascript is enabled for purposes of website accessibility

Why Match Group Inc. Stock Popped Today

By Jeremy Bowman - Feb 7, 2018 at 5:09PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Shares of the online dating leader jumped on a strong earnings report.

What happened

Shares of Match Group (MTCH) were surging today, as the online dating specialist posted strong results in its fourth-quarter earnings report. The stock was up as much as 10.8% during the trading session and finished 8.3% higher.

So what

It was an all-around strong quarter for Match, as revenue growth accelerated to 28.5% on the strength of the new Tinder Gold premium product, with the top line hitting $379 million, easily beating analyst expectations at $362 million. Operating expenses increased by 38%, however, as in-app purchasing fees rose by $27.2 million because of increased dependence on mobile app stores.  

A man whispers into the ear of a smiling woman

Image source: Getty Images.

As a result, operating income rose 13% to $127.7 million, and adjusted earnings per share fell from $0.29 to $0.18, largely because of an outsize tax payment from the effects of the new U.S. tax law. Analysts had expected a per-share profit of $0.32.

New CEO Mandy Ginsberg called the quarter "incredibly strong," noting that total subscribers have now topped 7 million and 3 million for Tinder alone.

Now what 

The quarter is the latest evidence of Match Group's long-term growth opportunity and the power of Tinder, which is supplying the majority of the company's growth. 

The company guided for revenue of $380 million to $390 million in revenue for the current quarter, ahead of estimates at $366 million, and $1.5 billion to $1.6 billion in revenue, which was within range of the analyst consensus. Management also touted its strong momentum heading in to the new year. Regarding Tinder, management plans to introduce new monetization features in the second half of the year, following efforts in the first half to make the experience better for free users. 

With the company coming off its fastest revenue growth in several quarters and margin expansion expected as Tinder expands, the stock looks set for another strong year.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Match Group, Inc. Stock Quote
Match Group, Inc.
MTCH

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
316%
 
S&P 500 Returns
112%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 07/04/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.