The recent drop in
stock price is a great buying opportunity, according to Jefferies.
The back story. Match Group stock (ticker: MTCH) has risen nearly 70% year to date because of strong earnings results. But the shares have fallen 20% from their high last month on competition concerns.
Match also owns Match.com, Tinder, and many other online dating brands.
What’s new. Jefferies analyst Brent Thill reaffirmed his Buy rating for Match shares on Wednesday. “We continue to believe MTCH is well-positioned to take advantage of the industry tailwinds within online dating. We are buyers,” he wrote. It is still a “top mid-cap pick.”
The analyst said his checks for Tinder “remain strong.” He also said the grossing rank—a measure of apps that generate the most revenue—for the online dating app in the App Store have averaged 2.5 in the U.S. in the third-quarter versus 3.5 a year ago. Thill also noted that Android app download numbers were robust.
Regarding Facebook’s entry into the U.S. online dating market earlier this month, the analyst noted that Facebook’s previous launches in other countries didn’t significantly impact Match’s online dating properties. “Facebook can’t be ignored, but we don’t believe it poses a long-term threat,” he wrote.
Looking ahead. Thilll reaffirmed his $105 price target for Match shares.
Later Wednesday, Match shares fell 2.3% to $71.13 after the FTC announced it has sued Match Group, alleging the company used “fake love interest ads” and unfair marketing practices.
In a news release, Match Group said “we intend to vigorously defend ourselves against these claims in court.”
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