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Factors Setting the Tone for Match Group's (MTCH) Q4 Earnings

Zacks Equity Research
·4-min read

Match Group, Inc. MTCH is slated to release fourth-quarter 2019 results on Feb 4.

Match Group expects fourth-quarter 2019 revenues between $545 million and $555 million. The Zacks Consensus Estimate for revenues is currently pegged at $552.81 million, indicating an improvement of 20.9% from the year-ago quarter.

The consensus for earnings is pegged at 50 cents per share, unchanged for the last 30 days. The figure suggests growth of 16.3% from the year-ago reported figure.

Strong product portfolio comprising Tinder, Match.com, OkCupid, Meetic, PlentyOfFish and Hinge are expected to have aided Match Group's fourth-quarter performance.

Notably, shares of Match Group have returned 54.5% in the past year, significantly outperforming the industry’s growth of 12.7%.



Markedly, the company beat the Zacks Consensus Estimate in the trailing four quarters by 22.23%, on average.

Factors at Play

Robust adoption of Tinder and growing clout of Tinder Gold subscription is expected to have benefited average subscriber base, which is likely to reflect in the fourth-quarter top line.

The Zacks Consensus Estimate for total average subscribers is pegged at 9.873 million for the fourth quarter, indicating an improvement of 19.9% from the prior-year quarter. Notably, the corresponding figure in the third quarter came in at 9.612 million.

Moreover, momentum in Tinder Gold subscriber base is likely to have aided Match Group to boost Average Revenue per Subscriber or ARPU. This, in turn, is expected have driven the fourth-quarter revenues.

The Zacks Consensus Estimate for ARPU is pegged at $0.60 for the fourth quarter, indicating an improvement of 3.4% from the year-ago reported figure. Notably, the corresponding figure in the third quarter came in at $0.59.

In the quarter under review, Match Group is anticipated to have benefited from growing clout of Tinder and OkCupid in India, amid rapid Internet penetration in South-East Asia. Consequently, this is likely to have bolstered International revenues in the fourth quarter. Notably, in the third quarter, OkCupid downloads hit 1.4 million in India.

Moreover, roll out of Tinder Lite in Vietnam and OkCupid in Israel and Turkey, is expected to have expanded user base. This, in turn, is likely to have benefited the fourth-quarter performance.

Match Group, Inc. Price and EPS Surprise

Match Group, Inc. Price and EPS Surprise
Match Group, Inc. Price and EPS Surprise

Match Group, Inc. price-eps-surprise | Match Group, Inc. Quote

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However, increasing expenditure on product enhancements with innovative initiatives amid competition from Facebook’s FB Facebook Dating is likely to have impacted profitability in the fourth quarter. Notably, the social-media giant rolled out Facebook Dating in the United States in September 2019.

Key Development in Q4

On Dec 19, 2019, Match Group entered into a definitive agreement to separate from its parent company — IAC/InterActiveCorp IAC.

Management is expected to divulge more details regarding the development in the fourth-quarter earnings conference.

What Our Model Says

According to the Zacks model, a combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat.

Although Match Group has a Zacks Rank #1, an Earnings ESP of 0.00% makes surprise prediction difficult. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stock to Consider

Here is a stock that you may consider, as our proven model shows that it has the right combination of elements to post an earnings beat this quarter.

Microchip Technology MCHP has an Earnings ESP of +1.33% and a Zacks Rank of 1. You can see the complete list of today’s Zacks #1 Rank stocks here.

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Click to get this free report

IAC/InterActiveCorp (IAC) : Free Stock Analysis Report

Match Group, Inc. (MTCH) : Free Stock Analysis Report

Facebook, Inc. (FB) : Free Stock Analysis Report

Microchip Technology Incorporated (MCHP) : Free Stock Analysis Report

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