On Thursday, BofA Securities adjusted its outlook on Match Group (NASDAQ:MTCH) shares, reducing the price target from the previous $46.00 to $44.00, while maintaining a Buy rating on the company's stock.
The adjustment came after Match Group reported its first-quarter financial results for the year 2024, which demonstrated both progress and challenges.
The company's revenue and EBITDA for the quarter were $860 million and $279 million respectively, marking increases of 9% and 6% year-over-year. These figures slightly exceeded the expectations of $856 million in revenue and $275 million in EBITDA.
Despite the positive overall performance, foreign exchange rates presented a 3 percentage point headwind.
Tinder, a key component of Match Group's portfolio, underperformed against expectations due to a decline in the number of paying users, with 9.71 million compared to the anticipated 9.83 million.
This shortfall was attributed to limited success in growth initiatives and a drop in Average Consumer Lifetime (ACL) purchasing trends, which the management linked to tighter discretionary spending.
On a brighter note, Hinge, another dating platform under Match Group, reported revenues of $123.7 million, a significant 50% increase year-over-year and surpassing the expected $120.7 million.
The company also demonstrated a strong commitment to returning value to shareholders, with approximately $200 million spent on share repurchases, accounting for 75% of its free cash flow (FCF).
Match Group signaled its intention to continue deploying a similar or even higher percentage of its FCF for buybacks throughout the remainder of the year, exceeding previous projections of at least 50% of FCF dedicated to this purpose.
InvestingPro Insights
Match Group (NASDAQ:MTCH) has been the subject of recent analyst attention following its Q1 2024 financial report. For investors considering Match Group's stock, the latest data from InvestingPro offers some compelling insights. With a market capitalization of $7.92 billion and an adjusted P/E ratio of 12.12, the company appears to be trading at a low price relative to its near-term earnings growth. This is supported by a PEG ratio of just 0.1 for the last twelve months as of Q1 2024, suggesting that Match Group's stock may be undervalued in terms of its growth rate.
Additionally, the company's revenue growth for the quarter was 9.21%, with a robust gross profit margin of 71.83%. These figures highlight the company's ability to generate earnings and maintain profitability. In line with the company's shareholder-friendly actions noted in the article, Match Group has a perfect Piotroski Score of 9, indicating a very healthy financial situation. Furthermore, InvestingPro Tips reveal that management has been aggressively buying back shares, which can be an indicator of confidence in the company's future performance and value to shareholders.
For those interested in deeper analysis and more tips, there are additional InvestingPro Tips available that provide further insights into Match Group's financial health and future prospects. Use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription for access to these valuable resources.
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