What happened
Shares of online-dating platform company Match Group (MTCH 0.79%) dropped like a rock on Wednesday after the company reported that its final quarter of 2022 was a dud. As of 12:30 p.m. ET, Match Group stock was down 9.3%, but it had been down as much as 10% earlier in the trading session.
So what
Match Group stock was the second-worst performer in the S&P 500 in 2022. Bernard Kim was named CEO in early 2022, tasked with reaccelerating the company's growth. And it appears the market was getting very optimistic about this possibility, considering the stock was up 30% to start 2023 prior to today's drop.
The turnaround isn't going as fast as the market hoped. For 2022, overall revenue was only up 7% year over year to $3.2 billion. And the company's operating income actually plunged 40% to $515 million due to impairment charges -- some of its platforms aren't as valuable as they once were.
Tinder is the most important platform for Match. And Tinder direct revenue was flat year over year in the fourth quarter, which isn't what investors had hoped for and why the stock is pulling back now from previous year-to-date gains.
Now what
The market is also reacting to Match Group's guidance. For 2023, the company is only guiding for 5% to 10% year-over-year growth, with the highest growth coming at the end of the year. In other words, the vision of seeing robust growth trends under Kim's leadership is still far out.
Here's the silver lining for Match Group shareholders: The company's operating margin is expected to rebound sharply sooner rather than later. For the upcoming quarter, management expects an adjusted margin of 32% -- very high. So while the growth rate isn't living up to expectations, Match has a chance of earning some juicy profits for shareholders if it executes.
