Please ensure Javascript is enabled for purposes of website accessibility

Why Match Group Inc Stock Gained 11% in March

By Jeremy Bowman – Apr 6, 2018 at 12:21PM

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 rose on momentum from its fourth-quarter earnings report and an analyst raising his price target.

What happened

Investors' love affair with Match Group Inc (MTCH) continued last month as the online dating specialist built on February's gains, riding momentum from a strong fourth-quarter earnings report and benefiting from an analyst raising his price target. According to data from S&P Global Market Intelligence, shares of the Tinder parent climbed 11% last month.

Reports of a legal tussle with rival Bumble dominated news about Match Group for much of the month, but momentum in the beginning weeks was enough to notch a double-digit gain.

MTCH Chart

MTCH data by YCharts.

So what

Match Group shares got a boost from Jefferies on March 7, gaining 3.4% after analyst Brent Thill raised his price target from $44 to $50. He said the stock still trades at a discount to other subscription-based internet companies, and a new paid Tinder feature should also help drive profits. 

Screenshots of the Tinder app showing a match

Image source: Tinder.

That helped build on momentum from its fourth-quarter earnings report, as Match Group reported another strong round of subscriber growth at Tinder, its most valuable property. 

Also last month, Tinder sued rival Bumble, alleging that the woman-centric dating app "copied Tinder's world-changing, card-swipe-based, mutual opt-in premise." 

Match Group had reportedly been interested in acquiring Bumble and some see the lawsuit as an attempt to strong-arm Bumble into a deal. Towards the end of the month, Bumble responded by suing Match Group for stealing trade secrets. 

Now what

Bumble's countersuit seems to indicate that both parties are unlikely to reach a deal. In a blog post and open letter to Match Group, Bumble said:

We swipe left on you. We swipe left on your multiple attempts to buy us, copy us, and, now, to intimidate us. We'll never be yours.

The bad blood between the two companies goes deep, as Bumble founder Whitney Wolfe Herd, who also co-founded Tinder, had sued her former company for sexual harassment.

Leaving aside the legal turmoil, Match Group continues to look poised for growth as it monetizes Tinder and the subscriber base continues to grow. I'd expect the online dating specialist to continue to outperform.

Jeremy Bowman owns shares of Match Group. The Motley Fool recommends Match Group. The Motley Fool has a disclosure policy.

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.

*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
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 09/27/2022.

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.