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Why Is Match Group (MTCH) Down 19% Since Last Earnings Report?
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It has been about a month since the last earnings report for Match Group (MTCH - Free Report) . Shares have lost about 19% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Match Group due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Match Group Q4 Earnings Grow Y/Y, Revenues Decline
Match Group reported fourth-quarter 2022 earnings of 30 cents per share, up 150% from the year-ago quarter’s loss of 60 cents per share.
The Zacks Consensus Estimate for fourth-quarter 2022 earnings was pegged at 47 cents per share.
Revenues of $786 million decreased 2% year over year, missing the Zacks Consensus Estimate by 0.33%.
Quarter in Detail
In the fourth quarter, the number of total payers declined 1% to 16.1 million compared to the prior-year quarter. The number of total payers from America and Europe decreased by 2% and 4%, respectively, whereas the Asia Pacific (APAC) saw an increase of 6% on a year-over-year basis.
America saw an increase in Payers at Tinder and Hinge. However, this was offset by a larger decline in payers at Match and Plenty of Fish. The decline in Europe Payers was driven by Tinder and Meetic, partially offset by an increase at Hinge while the increase in APAC was driven by Tinder.
Total RPP declined 1% year over year to $16. Region-wise, RPP increased 3.8% in America and decreased 14% in APAC while remaining unchanged year over year in Europe.
Europe and APAC RPPs were unfavorably impacted by the strength of the U.S. Dollar relative to the Euro and British Pound and the Japanese Yen and Turkish Lira, respectively.
Direct revenues from the Americas were up 2% to $406.5 million. Direct revenues from Europe and APAC decreased 4% to $210.3 million and 9% to $154.2 million, respectively.
Direct revenues from Tinder were flat year over year, with 3% payers growth to 10.8 million partially offset by an RPP decline of 2%.
Direct revenues from All Other Brands collectively declined 5% year over year, along with an 8% decline in payers, which was offset by 3% RRP growth. Within All Other Brands, Hinge’s direct revenues grew nearly 30% year over year in the fourth quarter of 2022.
For full-year 2022, Hinge’s direct revenues rose 44% year over year as a result of 25% payers growth and 15% RPP growth.
Operating Details
Total operating costs and expenses increased 1% year over year to $235.9 million in the fourth quarter.
Adjusted operating income was $286 million, declining 2% from the prior-year quarter, representing an adjusted operating income margin of 36%.
Balance Sheet
As of Dec 31, 2022, Match Group had a cash and cash equivalent and short-term investment of $581 million compared with $398 million as of Sep 30, 2022.
As of Dec 31, 2022, Match Group had long-term debt of $3.9 billion, the same as the previous quarter.
As of Dec 31, 2022, Match Group reported $1.2 billion of exchangeable senior notes and $750 million under its revolving credit facility. The amount was undrawn as of Dec 31.
Guidance
Match Group expects first-quarter 2023 revenues to be in the range of $790-$800 million, roughly flat year over year. Adjusted operating income for the first quarter is anticipated to be $250-$255 million, which indicates a decline of almost 12% year over year.
However, for the full year 2023, Match Group eyes revenue growth of 5-10% year over year.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
The consensus estimate has shifted -14.39% due to these changes.
VGM Scores
Currently, Match Group has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. However, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Match Group has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Why Is Match Group (MTCH) Down 19% Since Last Earnings Report?
It has been about a month since the last earnings report for Match Group (MTCH - Free Report) . Shares have lost about 19% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Match Group due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Match Group Q4 Earnings Grow Y/Y, Revenues Decline
Match Group reported fourth-quarter 2022 earnings of 30 cents per share, up 150% from the year-ago quarter’s loss of 60 cents per share.
The Zacks Consensus Estimate for fourth-quarter 2022 earnings was pegged at 47 cents per share.
Revenues of $786 million decreased 2% year over year, missing the Zacks Consensus Estimate by 0.33%.
Quarter in Detail
In the fourth quarter, the number of total payers declined 1% to 16.1 million compared to the prior-year quarter. The number of total payers from America and Europe decreased by 2% and 4%, respectively, whereas the Asia Pacific (APAC) saw an increase of 6% on a year-over-year basis.
America saw an increase in Payers at Tinder and Hinge. However, this was offset by a larger decline in payers at Match and Plenty of Fish. The decline in Europe Payers was driven by Tinder and Meetic, partially offset by an increase at Hinge while the increase in APAC was driven by Tinder.
Total RPP declined 1% year over year to $16. Region-wise, RPP increased 3.8% in America and decreased 14% in APAC while remaining unchanged year over year in Europe.
Europe and APAC RPPs were unfavorably impacted by the strength of the U.S. Dollar relative to the Euro and British Pound and the Japanese Yen and Turkish Lira, respectively.
Direct revenues from the Americas were up 2% to $406.5 million. Direct revenues from Europe and APAC decreased 4% to $210.3 million and 9% to $154.2 million, respectively.
Direct revenues from Tinder were flat year over year, with 3% payers growth to 10.8 million partially offset by an RPP decline of 2%.
Direct revenues from All Other Brands collectively declined 5% year over year, along with an 8% decline in payers, which was offset by 3% RRP growth. Within All Other Brands, Hinge’s direct revenues grew nearly 30% year over year in the fourth quarter of 2022.
For full-year 2022, Hinge’s direct revenues rose 44% year over year as a result of 25% payers growth and 15% RPP growth.
Operating Details
Total operating costs and expenses increased 1% year over year to $235.9 million in the fourth quarter.
Adjusted operating income was $286 million, declining 2% from the prior-year quarter, representing an adjusted operating income margin of 36%.
Balance Sheet
As of Dec 31, 2022, Match Group had a cash and cash equivalent and short-term investment of $581 million compared with $398 million as of Sep 30, 2022.
As of Dec 31, 2022, Match Group had long-term debt of $3.9 billion, the same as the previous quarter.
As of Dec 31, 2022, Match Group reported $1.2 billion of exchangeable senior notes and $750 million under its revolving credit facility. The amount was undrawn as of Dec 31.
Guidance
Match Group expects first-quarter 2023 revenues to be in the range of $790-$800 million, roughly flat year over year. Adjusted operating income for the first quarter is anticipated to be $250-$255 million, which indicates a decline of almost 12% year over year.
However, for the full year 2023, Match Group eyes revenue growth of 5-10% year over year.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates revision.
The consensus estimate has shifted -14.39% due to these changes.
VGM Scores
Currently, Match Group has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with a D. However, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Match Group has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.