It has been about a month since the last earnings report for Match Group (MTCH Quick QuoteMTCH - Free Report) . Shares have added about 10.9% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Match Group due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.

Match Group Q3 Earnings Beat Estimates, Revenues Rise Y/Y

Match Group reported third-quarter 2023 earnings of 57 cents per share compared with 58 cents per share in the year-ago quarter. The figure beat the Zacks Consensus Estimate by 7.55%.

Revenues of $881.6 million increased 9% year over year and beat the Zacks Consensus Estimate by 0.1%.

Quarter in Detail

In the third quarter, the number of total payers decreased 5% year over year to 15.7 million. The figure missed the Zacks Consensus Estimate by 0.15%.

The number of total payers from America and Europe decreased 9% and 2%, respectively, whereas the Asia Pacific (APAC) witnessed a decline of 1% on a year-over-year basis.

Total revenues per payer (RPP) increased 15% year over year to $18.39. The figure beat the Zacks Consensus Estimate by 0.23%.

Region-wise, RPP increased 21% in America, 19% in Europe and decreased 4% in APAC on a year-over-year basis.

Direct revenues from the Americas were up 10% to $455.2 million. Direct revenues from Europe increased 17% to $252 million, while the same from APAC decreased 4% to $159.6 million.

Direct revenues from Tinder were up 11% year over year to $509 million. The figure beat the Zacks Consensus Estimate by 0.54%.

Tinder RPP rose 18% year over year to $16.28, driven by pricing optimizations and new weekly subscription packages.

Payers declined 6% year over year to 10.4 million, primarily because of pricing optimizations in the United States, which reduced conversion. Tinder saw an acceleration in subscription revenue growth throughout the quarter.

Hinge revenues surged 44% year over year to $107 million, with a 33% year-over-year increase in payers to 1.3 million and an 8% year-over-year increase in RPP to nearly $27. Hinge continued to grow in English-speaking markets, as well as in its European expansion markets, leading to overall downloads growing nearly 44% year over year in the third quarter.

Match Group Asia Direct revenues declined 5% year over year to $77 million, while Azar revenues increased 20% year over year, helping to partially offset ongoing weakness at Pairs and Hakuna.

Evergreen and Emerging revenues declined 3% year over year to $174.3 million.

Operating Details

Total operating costs and expenses (72% of revenues) increased 7% year over year to $638 million in the third quarter.

Adjusted operating income was $333.1 million, up 17% year over year, representing an adjusted operating margin of 38%, which expanded 270 basis points.

Balance Sheet

As of Sep 30, 2023, Match Group had a cash and cash equivalent and short-term investment of $713 million compared with $741 million as of Jun 30, 2023.

As of Sep 30, 2023, MTCH had a long-term debt of $3.9 billion, unchanged sequentially.

During the quarter ended Sep 30, 2023, the company repurchased 6.7 million shares of common stock for $300 million. As of Oct 31, 2023, $667 million in aggregate value of shares of Match Group stock remains available under the previously announced share repurchase program.

Guidance

Match Group expects fourth-quarter 2023 revenues in the range of $855-$865 million. Apart from adverse forex, the guidance assumes challenging macroeconomic conditions globally to hurt MTCH’s advertising business.

Tinder revenues are expected to grow 11%, driven by higher year-over-year growth in RPP, offset by a larger decline in the Payer base.

Adjusted operating income for the fourth quarter is anticipated in the range of $305-$310 million, indicating roughly 7-9% growth year over year. Operating margin is expected to be 36% at the mid-point of the range.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a downward trend in estimates review.

The consensus estimate has shifted -11.32% due to these changes.

VGM Scores

Currently, Match Group has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of B on the value side, putting it in the top 40% 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.

Performance of an Industry Player

Match Group is part of the Zacks Internet - Commerce industry. Over the past month, Amazon (AMZN Quick QuoteAMZN - Free Report) , a stock from the same industry, has gained 6.8%. The company reported its results for the quarter ended September 2023 more than a month ago.

Amazon reported revenues of $143.08 billion in the last reported quarter, representing a year-over-year change of +12.6%. EPS of $0.85 for the same period compares with $0.20 a year ago.

Amazon is expected to post earnings of $0.77 per share for the current quarter, representing a year-over-year change of +266.7%. Over the last 30 days, the Zacks Consensus Estimate has changed +1.2%.

The overall direction and magnitude of estimate revisions translate into a Zacks Rank #2 (Buy) for Amazon. Also, the stock has a VGM Score of B.