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Why Meet Group Stock Lost 16% in March

By Demitri Kalogeropoulos – Updated Apr 2, 2019 at 2:40PM

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Shares gave up some of their recent gains following a mixed fourth-quarter report.

What happened

Shares of online dating specialist The Meet Group (MEET) trailed the market last month by shedding 16% versus an 1.8% uptick in the S&P 500, according to data provided by S&P Global Market Intelligence.

The decline still left shares in positive territory for 2019, and the stock has more than doubled in the past 52 weeks.

Four adults using their smartphones.

Image source: Getty Images.

So what

Investors weren't pleased with some of the specifics of the fourth-quarter earnings report that was issued early in the month. That announcement showed a 31% sales increase that was powered entirely through higher user-subscription fees. Advertising sales continued to slow, landing at $21 million, compared with $25 million a year earlier.

Now what

CEO Geoff Cook and his team predict that the advertising segment will stabilize in 2019, and so investors will be watching that metric over the next few quarters. Meanwhile, management is excited about the potential for video offerings in its apps, which can help boost user engagement and lift ad effectiveness.

As for sales growth, The Meet Group will get an immediate bounce from the recent acquisition of Growlr, a same-sex dating app with over 200,000 daily users. Now it's up to the company to optimize that business to ensure it delivers more value than the $12 million management paid for it.

Demitrios Kalogeropoulos has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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