BMO Capital Starts Match Group (MTCH) at Outperform

BMO Capital initiates coverage on Match Group (NASDAQ: MTCH) with a Outperform rating and a price target of $18.00.

Analyst Daniel Salmon commented, "We are initiating coverage of The Match Group with an Outperform rating and $18 price target. We like the stock’s prospects for three primary reasons: 1) we believe Match’s portfolio approach provides an over-arching strategy to deliver more tailored dating experiences to more demographics, bring new online daters into the portfolio, and keep them within the portfolio as their dating needs change over time. The portfolio strategy is also vital to managing any potential cannibalization of legacy brands; we see low double-digit organic revenue growth across the portfolio as the TAM of online daters expands, we also see many ways for Match to be successful even if one of its legacy brands begins to shrink; 2) an emerging mobile advertising opportunity spearheaded by the viral success of Tinder; the app’s millennial usage and rich ad formats are in high demand, and we expect this demand to lead a more sophisticated advertising strategy that can better complement Match’s core competency in converting free users to paid members; 3) while the faster-growing brands generate lower ARPPU, they also offer a bigger advertising opportunity and superior EBITDA margins. Key risks include the plethora of apps (Hinge, Bumble, etc.) mimicking Tinder’s “swipe right, swipe left” functionality and the potential to impact user growth and monetization prospects."

For an analyst ratings summary and ratings history on Match Group click here. For more ratings news on Match Group click here.

Shares of Match Group closed at $13.84 yesterday.

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