Match Group (MTCH) to Post Q2 Earnings: What’s in the Cards? | #tinder | #pof

Match Group, Inc. MTCH is slated to report second-quarter 2020 results on Aug 4.

Due to COVID-19 related uncertainties prevailing in the market, the company hasn’t provided any concrete figures for revenue guidance.

Notably, Match Group expects second-quarter revenues to grow year over year but decline sequentially on a percentage basis by low-single digits. The company had generated revenues of $498 million in second-quarter 2019 and $544.6 million in first-quarter 2020.

The Zacks Consensus Estimate for revenues is currently pegged at $528.7 million, indicating a decline of 55.5% from the year-ago quarter.

The consensus for earnings is pegged at 56 cents per share, unchanged for the last seven days. The figure suggests a decline of 52.9% from the year-ago reported figure.

Factors to Note

Decline in new signups and disinterest in propensity to pay since the COVID-19 outbreak are likely to have affected second-quarter performance.

Nevertheless, increase in activity across all brands since the outbreak might have contributed to average subscriber base, courtesy of solid contribution from Tinder, Hinge and Pairs. This, in turn, is expected to get reflected in the second-quarter revenues.

Moreover, roll out of Tinder Lite and OkCupid across Asian countries amid rapid Internet penetration may have contributed to International revenues in the quarter to be reported.

Besides growing usage of video dating among users under the age of 30, with a significant number of people using Tinder’s Passport feature to connect with users from other countries, might have benefited the to-be-reported quarter’s performance.

Markedly, Match Group owned dating app — Plenty of Fish — has rolled out a free live streaming feature called LIVE! to encourage members to practice social distancing while dating amid the coronavirus outbreak. Moreover, Hinge app has launched a ‘Dating from Home’ feature and a ‘Date Ready’ feature that enables live video dating.

In the backdrop of the coronavirus crisis-induced shelter-in-place guidelines, Match Group’s focus on adding video dating capabilities may have limited decline in revenues in the quarter to be reported.

Notably, the company has already integrated life streaming features to Plenty of Fish and Twoo, which effectively enables users to conduct live dates over video.

Nevertheless, Match Group’s peers are not far behind, with Bumble and Jewish dating app — JWed — also adopting video and voice features. Increasing expenditure on product enhancements with innovative initiatives amid intense competition is likely to have weighed on the second-quarter profitability.

Notable Developments

Recently, IAC/InterActiveCorp IAC and Match Group announced the completion of the separation of Match Group from the remaining businesses of IAC. Management is expected to divulge more details regarding the development in the second-quarter earnings conference.

During the second quarter, Match Group announced an agreement with Bumble to settle all litigations between the companies. However, details of the deal have not been disclosed.

What Our Model Says

Our proven model doesn’t conclusively predict an earnings beat for Match Group this time around. 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.

Match Group has a Zacks Rank #4 (Sell). You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks to Consider

Here are a couple of stocks that you may consider, as our proven model shows that these have the right combination of elements to post an earnings beat this quarter.

Fastly, Inc. FSLY has an Earnings ESP of +27.27% and a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Synaptics Incorporated SYNA has an Earnings ESP of +10.60% and a Zacks Rank of 2.

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