Match Reports Strong Q3; Further Currency and Macro Headwinds in Q4 and 2023; Shares Undervalued

Match Group posted better-than-expected third-quarter results as growth in Tinder and Hinge offset the impact of the stronger dollar and further weakness in the firm’s other apps. An increase in users, accompanied by growth in revenue per user, on a constant currency basis, displayed the firm’s network effect moat source, which we believe the firm’s current and future portfolio of apps will help maintain. While management’s outlook for 2023 was below our expectation, we were pleased that the firm will invest in growth for Tinder and Hinge while applying further cost controls. After reducing our top- and bottom-line projections because of the macro uncertainty and the ongoing currency headwind, our fair value estimate now stands at $75, down from $83.