Yahoo Finance Why Is Match Group (MTCH) Up 2.8% Since Last Earnings Report?
It has been about a month since the last earnings report for Match Group (MTCH). Shares have added about 2.8% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Match Group due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Match Group Q1 Earnings Beat, Revenues Decline Y/Y
Match Group (MTCH) reported first-quarter 2023 earnings of 42 cents per share, down 30% from the year-ago quarter’s earnings of 60 cents per share.
The Zacks Consensus Estimate for first-quarter 2023 earnings was pegged at 40 cents per share.
Revenues of $787 million decreased 1% year over year, missing the Zacks Consensus Estimate by 0.92%.
Quarter in Detail
In the first quarter, the number of total payers increased 10% to 16.4 million from the prior-year quarter. The number of total payers from America and Europe decreased 2% and 7%, respectively, whereas the Asia Pacific (APAC) saw an increase of 1% on a year-over-year basis.
America saw an increase of payers at Tinder and Hinge. However, this was offset by a larger decline of payers at Match and Plenty of Fish. The decline in Europe payers was due to Tinder and Meetic, partially offset by an increase at Hinge while increase in APAC was driven by Tinder.
Total RPP increased by 2% year over year to $16.26. Region-wise, RPP increased 4% in America and 6% in Europe but decreased 9% in APAC year over year.
APAC RPPs were unfavorably impacted by the strength of the U.S. dollar relative to the British pound and Japanese yen and Turkish lira, respectively.
Direct revenues from the Americas were up 1% to $405.9 million. Direct revenues from Europe and APAC decreased 1% to $212.5 million and 7% to $155.9 million, respectively.
Direct revenues from Tinder were flat from the prior-year quarter due to relatively flat year-over-year payers and RPP, which were 10.7 million and $13.80 for the quarter, respectively.
Direct revenues from All Other Brands collectively declined 3% year over year, along with a 3% decline in payers, which was offset by 2% RRP growth.
For the first quarter of 2023, Hinge’s direct revenues rose 27% year over year as a result of payers exceeding one million and RPP exceeding $25.
Operating Details
Total operating costs and expenses increased 1% year over year to $588.8 million in the first quarter.
Adjusted operating income was $263 million, declining 4% from the prior-year quarter, representing an adjusted operating income margin of 33%.
Balance Sheet
As of Mar 31, 2023, Match Group had a cash and cash equivalent and short-term investment of $578 million compared with $581 million as of Dec 31, 2022.
As of Mar 31, 2023, Match Group had long-term debt of $3.9 billion, remaining same as the previous quarter.
As of Mar 31, 2023, Match Group reported $1.2 billion of exchangeable senior notes and $750 million under its revolving credit facility. The amount was undrawn as of Mar 31.
Guidance
Match Group expects second-quarter 2023 revenues in the range of $805-$815 million, indicating roughly 1-3% growth year over year. Adjusted operating income for the second quarter is anticipated in the range of $275-$280 million, which indicates a decline of almost 2% year over year.
However, for the full-year 2023, Match Group eyes revenue growth of 5-10% year over year.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month.
VGM Scores
At this time, Match Group has a great Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of B on the value side, putting it in the top 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Match Group has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Match Group belongs to the Zacks Internet - Commerce industry. Another stock from the same industry, Amazon (AMZN), has gained 16.3% over the past month. More than a month has passed since the company reported results for the quarter ended March 2023.
Amazon reported revenues of $127.36 billion in the last reported quarter, representing a year-over-year change of +9.4%. EPS of $0.31 for the same period compares with $0.21 a year ago.
Amazon is expected to post earnings of $0.34 per share for the current quarter, representing a year-over-year change of +240%. Over the last 30 days, the Zacks Consensus Estimate has changed +1.4%.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Amazon. Also, the stock has a VGM Score of B.
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