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Match Group Has Potential, but Don't Commit Yet

The narrow-moat firm has an appealing portfolio of online dating brands, but we recommend investors wait for a better entry point.

Match Group Has Potential, but Don't Commit Yet

Ali Mogharabi: On the back of online dating becoming mainstream, Internet and mobile device users increasing globally, and the growth of the singles population worldwide, Match Group, with its portfolio of online dating brands, has become the leader in this space. We think the firm has carved out a narrow economic moat, thanks to network effects which continue to drive top- and bottom-line growth, generating strong returns on invested capital.

The firm, of which 83% is owned by IAC/InterActiveCorp, has more than 45 brands of online dating sites and/or apps, including Tinder,, and PlentyOfFish. We believe by creating and acquiring various online dating products with each serving different people in terms of demographics, Match Group successfully created a network effect for its entire portfolio of services that is becoming more mainstream. The worldwide addressable market for Match Group's dating business is between $3 billion and $6 billion.

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Ali Mogharabi does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.