Please ensure Javascript is enabled for purposes of website accessibility

Why Investors Fell in Love With Match Group Inc Last Month

By Travis Hoium – Sep 6, 2018 at 2:11AM

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

Tinder has become a go-to in online dating.

What happened 

Shares of dating company Match Group Inc (MTCH) jumped 38.6% in August, according to data provided by S&P Global Market Intelligence, after reporting an outstanding quarter. 

So what 

Revenue jumped 36% to $421.2 million in the second quarter and earnings more than doubled to $0.45 per share. Results were driven by Tinder, which added 299,000 paid members to 1.7 million out of 3.8 million users overall. 

Illustration showing two smartphones side by side with woman reaching out of one and man reaching out of the other with flowers towards the woman.

Image source: Getty Images.

Overall, Match Group's user base rose 27% to 7.7 million, showing strong growth overall. But what encouraged investors most was the rapid growth at Tinder and the number of users willing to pay to use the company's services. 

Now what 

Management expects the good times to continue rolling after increasing full-year revenue guidance from $1.6 billion to $1.7 billion to a range of $1.68 billion to $1.72 billion. And adjusted EBITDA guidance was narrowed by $25 million on the bottom end to $625 million to $650 million. 

Match Group has clearly been able to gather enough users to its platforms, particularly Tinder, to become the go-to in online dating. The more users it attracts the more attractive the platform is becoming to new users. And there's enough value to users to start paying for services, a trend that doesn't look like it will stop anytime soon. 

Travis Hoium has no position in any of the stocks mentioned. The Motley Fool recommends Match Group. The Motley Fool has a disclosure policy.

Premium Investing Services

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