Analyst Note| Ali Mogharabi |
Match beat fourth-quarter 2020 expectations on the top line but came up short on the bottom line. Tinder user growth slowed, but growth in non-Tinder users accelerated year over year for the third consecutive quarter. While we are not certain whether non-Tinder user growth is coming at the expense of faster growth in Tinder users, it appears that Match’s diversified portfolio is performing well on all fronts. Management provided full-year outlook in line with the FactSet consensus, although the latest revenue consensus is at the high end of the range provided by the firm. We increased our projections and expect 2021 revenue above the guidance range, as we believe pent-up demand and more long-term changes in romance- or partner-seeking behavior will benefit Match. After rolling our model forward, our fair value estimate for Match increased to $111, up from $87. While the stock dipped around 8% after the firm’s earnings release, we continue to believe that this narrow-moat name is too expensive for new investors.