New competition, a lawsuit by the Federal Trade Commission, and a looming spinoff from parent IAC (IAC) all show Match Group (MTCH) has a full plate heading into its third-quarter earnings report.

Even though shares of the dating app site have pulled back from their all-time high in August, Match stock still trades some 70% higher than where it started 2019 and has more than doubled from its 52-week lows. With a lot of fast-moving parts to consider, let's see what Match investors can expect when it reports earnings on Tuesday, Nov. 5.

Woman smiling at phone as hearts trail away

Image source: Getty Images.

A trio of concerns

The new Dating feature from Facebook (META 0.44%) finally went live in the U.S. While the service might have trouble getting traction if people are concerned it will be as cavalier with user data as Facebook has often been, it still has a monstrous base of potential customers. And as my colleague Adam Levy recently pointed out, Facebook can then poach the best features from various Match properties, the same way it did to Snapchat to benefit Facebook's Instagram. Also serving as a boon for Facebook's new dating feature, the social network plans to integrate Instagram Stories into the Dating app.

The launch of the competing service also comes at a bad time for Match Group because the FTC alleges as many as 30% of its namesake service's member profiles are fake and have been used to perpetrate scams. Worse, the regulatory agency charges that not only did Match know they were fake accounts, it also used them to attract more people to pay for the service. The FTC says that over a three-year period, over half the initial contacts members received were from accounts Match had flagged as fraudulent. That could make users more leery of the service than of Facebook's.

Of equal concern to investors is the spinoff from IAC, because the media company is looking to saddle Match with debt when it effects the separation. IAC owns over 80% of Match's equity. 

IAC is planning to transfer nearly $1.7 billion in debt to Match, which would more than double the $1.6 billion it already has on its balance sheet while also forcing Match to take on more debt on top of it to pay IAC and other shareholders a special dividend.

More clouds on the horizon

Other concerns investors should have with Match heading into the earnings report is the dating app's slowing revenue growth and the potential for user growth in the industry as a whole to dramatically slow over the next few years.

Match's revenue growth rate could be cut in half this year when compared to last year. Further, market researchers at eMarketer have slashed their forecast for dating app user growth in half. Where eMarketer previously thought users would increase 10% annually through 2022, it now anticipates they'll grow only 5.3% a year.

Muted growth expected

Analysts are looking for Match Group to grow revenue 21% in the third quarter to $539 million, with earnings increasing by almost a like amount to $0.47 per share -- healthy, but also a slower rate than last year when revenue grew 29% and adjusted earnings more than doubled.

The real test might be how well Match can still attract new subscribers and how much it can extract from them. Average revenue per user has shrunk to just 2% growth, and while the big factors facing Match may not actually impinge on third-quarter earnings, they'll loom large as the dating site moves forward from here.

Match Group is turning from a growth stock into a more mature company, yet it has a lot of plates in the air at the moment. While it does have plans to expand further internationally and offer new features to help distinguish it from the competition, there may not be enough that's new to help it keep on a fast-enough track higher.