Please ensure Javascript is enabled for purposes of website accessibility

Better Buy: Momo vs. Match

By Prosper Junior Bakiny - Jan 23, 2020 at 12:00PM

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

Which of these two online dating specialists presents the better investment prospects?

The world of online dating is crowded with many companies looking to carve out a niche for themselves. Two of the most successful are Momo, which is the largest online dating service in China, and Match, which owns such websites and apps as Plenty of Fish, OkCupid, and Tinder.

Both of these stocks performed well last year, with Match's 92% gain outpacing Momo's 41% gain. Will Match continue to outperform Momo moving forward? Let's dig into these companies' respective businesses and see which is the better growth stock to buy today. 

Core operations

Match, which is in the process of separating from its parent company IAC/InterActiveCorp, generates the bulk of its revenue via paid subscriptions, particularly on its crown jewel, Tinder. Momo describes itself as a mobile-based social and entertainment platform, and the company makes most of its money from its live video services. Momo started offering live video streams on its app in 2015, and the feature allows users to buy virtual gifts and offer them to their favorite streamers. Momo keeps a percentage of the revenue from these virtual gifts.

Person browsing dating app on a phone.

Image source: Getty Images.

The Chinese tech company also operates a segment called value-added service, which generates money from paid subscriptions on its namesake app and another dating app it owns called Tantan. The value-added service segment also makes money from the exchange of virtual gifts (outside of the video feature). Lastly, Momo makes money via mobile marketing and mobile games. 

Financial results

During the third quarter, Momo recorded 114.1 million monthly active users (MAUs), a 3.3% year-over-year increase, and the company recorded a net revenue figure of $622.8 million, 22% higher than the year-ago period. Further, Momo recorded an operating income of $138.9 million and a net income of $125 million. 

By contrast, Match's average subscribers for the third quarter was 9.6 million, 19% higher than the prior-year quarter, and the company's $541 million revenue increased by 22% year over year. Match's average revenue per user (ARPU) was $0.59 and grew by 4% year over year. Also, the tech company recorded an operating income of $177 million and a net income of $151.5 million. 

While Momo recorded a higher revenue during the third quarter, Match seems to be doing a better job of controlling costs, with its net margin of 28% coming ahead of Momo's 20% net margin. However, Momo's revenue growth -- while decelerating in recent quarters -- is still more impressive than Match's, as the following table shows. 

YOY Revenue Growth


Q3 2018

Q4 2018

Q1 2019 

Q2 2019

Q3 2019

Momo (MOMO -1.38%)






Match (MTCH)






Data sources: Momo and Match. YOY = year over year.


Match seems significantly more expensive than Momo when looking at their respective price to earnings (P/E) ratios. Match currently trades at 46.3 times forward earnings, whereas Momo trades at an attractive 9.8 times forward earnings. But comparing their price to earnings growth (PEG) tells a very different story: Match's current PEG is 3.07, and while still a bit high, it compares favorably to Momo's PEG of 31.9. In other words, Match is the much cheaper stock when taking into account expected earnings growth. 

The verdict

Momo has a more versatile business, with its revenue coming from many different sources, including its video streaming and mobile gaming businesses. Momo also boasts more users overall than Match does. But Match seems to be doing a better job of controlling its costs and boasts higher margins. Further, Match provides better value, with its PEG being much lower than that of Momo. For those reasons, I think Match wins this head-to-head matchup. 

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

MOMO Stock Quote
$4.99 (-1.38%) $0.07
Match Group, Inc. Stock Quote
Match Group, Inc.
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 service.

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 05/17/2022.

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.