Match Group (MTCH) has formed a pretty lovely moat around its business over the years, with some of the best-known dating products under its portfolio, including Tinder, OkCupid, and Plenty of Fish.
Undoubtedly, Match acquired its way to the top of budding industry, giving its users plenty of different ways of accomplishing the same goal.
In a way, Match Group is akin to the likes of a social-media powerhouse like Facebook (FB). Unlike the social-media behemoth, though, Match Group is still a relatively small company with a market cap of around $43.5 billion.
That means it can continue acquiring its competitors without drawing too much attention from anti-trust regulators. For that reason, I am bullish on Match Group stock, even as COVID-19 headwinds persist. (See Match Group stock charts on TipRanks)
Has Match Group met its Match?
Popular dating app Bumble (BMBL) has proven itself as a worthy competitor to Match. Bumble recently had a successful IPO, providing investors with a smaller-cap way to play the dating industry.
The $10-billion Bumble has much more room to run versus the likes of Match Group. Although Match may not acquire the firm post-IPO at today’s lofty valuations, don’t count on Match sitting around, as a new up-and-comer looks to take away subscribers.
Like Facebook, Match has an ear on the industry. If there’s a hot new app, you can count on Match to adapt and implement changes or improvements that have proven to find a spot with consumers.
The biggest question mark with Match Group is its valuation. At over 13 times sales, the stock is not cheap, even given COVID-19 headwinds that may be sticking around for longer than most expect.
Wall Street’s Take
According to TipRanks’ consensus analyst rating, MTCH stock comes in as a Moderate Buy. Out of seven analyst ratings, there are five Buy recommendations, and two Hold recommendations.
The average Match Group price target is $174.86. Analyst price targets range from a low of $148 per share, to a high of $190 per share.
Bottom Line
Although expensive, you’re getting a dominant behemoth that can likely sustain a respectable double-digit growth rate on the other side of this pandemic.
Tinder is still one of the hottest apps out there. For that reason, Match Group should be the preferred way to play the space.
Disclosure: Joey Frenette doesn’t own shares of any mentioned companies at the time of publication.
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