Match Group's (MTCH) stock recently plunged after the online dating giant posted mixed fourth-quarter numbers. Its revenue rose 20% annually to $547 million but missed expectations by nearly $6 million.

Its net income grew 14% to $132 million, or $0.45 per share, which beat estimates by a penny, while its adjusted EBITDA grew 22% to $215 million. Those numbers weren't disastrous, but two issues raised questions about Match's future.

First, Match expects its first-quarter revenue and adjusted EBITDA to rise 18% and 11% year-over-year, respectively, at the midpoint of its guidance. Analysts had expected its revenue to rise 21%, with 20% adjusted EBITDA growth.

Second, CEO Mandy Ginsberg, who worked at Match for 14 years and held the top job since Aug. 2017, announced her resignation a week before the earnings report. Her successor, Sharmistha Dubey, will take over on March 1.

Love icons float out of a smartphone screen.

Image source: Getty Images.

Will a CEO change in the middle of a slowdown affect Match's future? Let's take a closer look at the transition, review the key challenges Dubey faces, and see if the stock is still worth buying after rallying nearly 40% over the past 12 months.

Why is Ginsberg resigning?

Match didn't offer any official reasons for Ginsberg's upcoming departure, but an internal memo obtained by The Wall Street Journal cites personal reasons, including a recent surgery and damage to her Dallas home during a tornado.

Ginsberg started her career at IAC (IAC), the former parent of Match Group, in 2006. Her departure will precede IAC's complete divestiture of its stake in Match, which is expected to close in the second quarter of 2020.

Ginsberg's exit also coincides with new C-suite promotions at Match. CFO Gary Swidler will take on an additional role as Match's new chief operating officer. It also named Faye Iosotaluno as its chief strategy officer, and Justine Sacco as its chief communications officer. The expansion of that management team should strengthen Match's foundations as a stand-alone company.

Who is Match's new CEO?

Sharmistha Dubey has also been with Match for 14 years. She served as Match's president over the past two years and sat on its board since late 2019.

A man uses a dating app.

Image source: Getty Images.

Prior to becoming Match's president, Dubey served as Match's chief product officer and the chief operating officer of Tinder. In 2017, she spearheaded the launch of Tinder Gold in 2017, which subsequently became the app's core growth engine.

Tinder Gold is a $5 per month upgrade for Tinder Plus subscribers, who already pay $10 a month (or $20 for users over the age of 30) in most developed markets.

Tinder Plus allowed users to undo swipes, swipe overseas, use "super likes" to get a user's attention, and "boost" the visibility of their profiles. Tinder Gold added curated "top picks" and allowed users to see who liked them (to start chatting right away).

Those new features caught fire, and Gold users accounted for over 70% of Tinder's entire subscriber base last August. Tinder's revenue surged, eclipsing the company's other dating apps, and became the highest-grossing app of 2019, according to App Annie. Dubey's track record makes her a natural choice for the CEO role and suggests that the company will prioritize the growth of Tinder with new features.

Where is Tinder headed?

During Match's latest investor presentation, the company highlighted three top priorities for Tinder: trust and safety, product innovation, and growth in revenue and user numbers.

To improve user trust, Tinder added an in-app emergency alarm and new features for photo verification, harassment detection, and protected phone numbers. To continue innovating, it's dabbling with new features like Swipe Night, improving its user filters for better matches, and localizing content for Gen Z users worldwide.

To continue growing, Tinder will roll out new monetization models in Asia, focus on "power users," and add new a la carte services in the second half of 2020. Tinder hit 5.9 million subscribers at the end of fiscal 2019, and it's targeting the addition of over a million new users this year.

Investors probably shouldn't expect a Gold-like boost in Tinder revenue this year, but Dubey and her team are likely cooking up new ways to generate fresh growth.

The key takeaways

Match's soft guidance for the first quarter raises concerns about Tinder's near-term growth, but a momentary lull after Gold's meteoric growth isn't surprising. Its new CEO will likely fire up some new growth engines, but they won't move the needle right away.

The real issue with Match is the stock's valuation. Analysts expect its revenue and earnings to rise by 18% and 7%, respectively, next year. Those growth rates are still low for a stock that trades at over 40 times forward earnings. Therefore, it might be prudent to wait for Match's valuations to cool off a bit before eagerly buying its post-earnings dip.