Match Posts Disappointing Q2 Results, Provides Weak Guidance; Lowering Fair Value Estimate to $83

Match reported disappointing second-quarter results mainly due to foreign-exchange headwinds, a further slowdown in Tinder growth, weakness in the Asia-Pacific region, and lack of growth in some of its established app brands. New CEO Bernard Kim has already taken steps to address the disappointing performance of Tinder and implement cost controls while continuing to invest in Hinge’s growth. While management provided disappointing second-half guidance, we expect a return to double-digit top-line growth accompanied by margin expansion in 2023, driven mainly by acceleration in Tinder growth and further monetization of Hinge. We are reducing our fair value estimate for narrow-moat Match to $83 per share from $107. This 4-star stock is down 17% in reaction to the Aug. 2 earnings release.