KeyBanc Sets Price Target on Match Group Stock From Investing.com

KeyBanc Capital Markets maintains its Overweight rating on Match Group (NASDAQ:) and reiterates its $45.00 price target. The firm’s analysis suggests a cautious stance on the company’s revenue and adjusted operating income (AOI) for the second half of the year. The reason is cited as slower-than-expected improvements to the company’s à la carte features.

Match Group, which will soon report its third-quarter results, has taken longer than originally planned to roll out its a la carte expansions. This led to KeyBanc slightly reducing its revenue and AOI forecasts for the second half of the year. However, overall user engagement remains strong, which the analyst sees as a positive sign for the company’s near-term performance.

The analyst emphasizes that while there are near-term challenges, fundamentals such as Tinder’s monthly active users (MAU) and progress in year-over-year paid user growth are encouraging. This optimism is based on the expectation of a healthy user base, which is expected to contribute to the company’s financial growth.

KeyBanc’s analysis suggests potential for Match Group to return to year-over-year paid user growth by the first quarter of next year. The firm’s overweight rating signals its confidence in the stock’s performance relative to the market, with the $45.00 price target set at an 11.0x multiple of the forecast enterprise value to adjusted operating income (EV/AOI) ratio for 2025 is based.

The confirmation of the price target and rating comes as Match Group continues to navigate the competitive online dating market. The KeyBanc analyst suggested that the company’s long-term prospects remain favorable despite near-term headwinds.

In other recent news, Match Group has experienced significant developments in its leadership and financial performance. Steven Bailey, currently senior vice president of financial planning and operations, will assume the role of chief financial officer in March 2025.

Match Group’s second-quarter earnings report showed a 4% year-over-year increase, with total revenue reaching $864 million, driven primarily by popular dating platforms Tinder and Hinge. The company also announced plans to streamline operations, including a reduction in workforce that is expected to generate annual cost savings of $13 million.

Goldman Sachs and Piper Sandler maintained their Buy and Overweight ratings on Match Group, respectively, while RBC Capital raised its price target to $47. These ratings reflect confidence in the company’s long-term growth prospects and strategic initiatives. Analysts have highlighted improvements at Tinder and optimism about Hinge’s international expansion as key factors in their positive view.

Investing Pro Insights

Recent additional data from InvestingPro provides context to KeyBanc’s analysis for Match Group (NASDAQ:MTCH). The company’s price-to-earnings (P/E) ratio of 15.67 and adjusted P/E ratio of 15.0 for the trailing twelve months suggest that the stock is trading at a relatively modest valuation compared to its earnings. This is consistent with an InvestingPro tip that says Match Group will “trade at a low P/E relative to near-term earnings growth,” which could support KeyBanc’s overweight rating.

Additionally, Match Group’s trailing twelve month revenue growth of 8.07% and strong EBITDA growth of 10% demonstrate the company’s ability to build its business, even when faced with challenges in launching a la carte -Functions is faced. The robust gross margin of 72.26% highlights the company’s efficient operations, which could provide a buffer as it works to improve its product offerings.

An InvestingPro Tip notes that “management is aggressively buying back shares,” which could indicate confidence in the company’s future prospects and align with KeyBanc’s optimistic view of user trends and potential growth in paying users. Additionally, as another InvestingPro tip highlights, Match Group’s strong return over the last three months confirms the positive sentiment reflected in the KeyBanc analysis.

For investors looking for a more comprehensive analysis, InvestingPro offers 6 additional tips that could provide further insights into Match Group’s financial health and market position.

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