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Match Group (MTCH) Q1 Earnings Preview: What to Expect?
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Match Group, Inc. (MTCH - Free Report) is set to report first-quarter 2017 earnings results on May 2.
The company went public in Nov 2015 and in its first earnings announcement, as a publicly-traded company, Match Group had missed earnings estimates by 5.3%.
The succeeding quarters proved to be much better, with the company’s earnings beating estimates in three of the four trailing quarters, for an average beat of 13.2%. Last quarter, it reported in-line earnings.
Let's see how things are shaping up for its sixth earnings report as a public company.
Key Factors Influencing Q1 Results
Match Group is the world’s foremost provider of dating products and operates a portfolio of over 45 brands. Three of its biggest and best known brands are Match.com, OkCupid and Tinder. The company’s reputation, established user base and size should prove to be favorable in the upcoming earnings.
About 60% of the company’s revenues come directly from the users of its dating services in North America, mostly in the form of membership subscriptions. Online dating has been expanding, as users from more demographics join the fray. Most of Match Group’s users connect from mobile devices, where conversion to paid members is also higher. Last quarter, its dating revenues rose 22% year over year, driven by solid contribution from Tinder, Pairs and PlentyOfFish. This momentum bodes well for the company’s top-line growth in the quarter under review.
Match Group has been making profits for the past three years and recording top-line growth as well. The company is currently enjoying strong growth, driven by robust growth momentum at Tinder, solid performances from Meetic and Match, as well as the recently acquired, PlentyOfFish.
However, the company is vulnerable to the cannibalization of users and revenues across its competing platforms. In fact, its average revenue per paying user was flat year over year in the last reported quarter, reflecting the shift of the company’s focus toward lower-paying brands, such as Tinder and OkCupid. The numbers were also adversely affected by appreciation of the U.S. dollar. These factors might affect the company’s top line in this quarter too.
Online dating is, by nature, a highly competitive and fragmented industry. New players and free services keep snatching market share, which makes it tough for established players to retain a foothold in the market. Further, the company has been struggling with monetization of its services, in the face of intensifying competition in the online dating space, with apps like Bumble, Hinge and Coffee Meets Bagel. This might just prove detrimental to the company’s top-line growth in the coming quarters.
Match Group had earlier anticipated year-over-year revenue growth of 15–20% in 2017. However, recent currency trends (strengthening U.S. dollar against the Euro and the Yen), will likely hurt those projections. Also, the company expects ARPPU growth to be flat in the near future.
In the last quarterly report, Match Group had projected revenues of $1.26–$1.31 billion, with an adjusted EBITDA of $450–$470 million for full-year 2017.
Match Group, Inc. Price, Consensus and EPS Surprise
Our proven model does not conclusively show that Match Group will beat earnings estimates in this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. But that is not the case here as you will see below.
Zacks ESP: Earnings ESP for the company is 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are currently pegged at 10 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Match Group has a Zacks Rank #4 (Sell). As it is, we caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks That Warrant a Look
Here are some companies that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this quarter:
Global Partners L.P. (GLP - Free Report) has an Earnings ESP of +233.33% and a Zacks Rank #1. The partnership is anticipated to release earnings on May 9.
NOW Inc. (DNOW - Free Report) has an Earnings ESP of +17.39% and a Zacks Rank #2. The company is likely to release earnings on May 3.
Sell These Stocks. Now.
Just released, today's 220 Zacks Rank #5 Strong Sells demand urgent attention. If any are lurking in your portfolio or Watch List, they should be removed immediately. These are sinister companies because many appear to be sound investments. However, from 1988 through 2016, stocks from our Strong Sell list have actually performed 6X worse than the S&P 500.
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Match Group (MTCH) Q1 Earnings Preview: What to Expect?
Match Group, Inc. (MTCH - Free Report) is set to report first-quarter 2017 earnings results on May 2.
The company went public in Nov 2015 and in its first earnings announcement, as a publicly-traded company, Match Group had missed earnings estimates by 5.3%.
The succeeding quarters proved to be much better, with the company’s earnings beating estimates in three of the four trailing quarters, for an average beat of 13.2%. Last quarter, it reported in-line earnings.
Let's see how things are shaping up for its sixth earnings report as a public company.
Key Factors Influencing Q1 Results
Match Group is the world’s foremost provider of dating products and operates a portfolio of over 45 brands. Three of its biggest and best known brands are Match.com, OkCupid and Tinder. The company’s reputation, established user base and size should prove to be favorable in the upcoming earnings.
About 60% of the company’s revenues come directly from the users of its dating services in North America, mostly in the form of membership subscriptions. Online dating has been expanding, as users from more demographics join the fray. Most of Match Group’s users connect from mobile devices, where conversion to paid members is also higher. Last quarter, its dating revenues rose 22% year over year, driven by solid contribution from Tinder, Pairs and PlentyOfFish. This momentum bodes well for the company’s top-line growth in the quarter under review.
Match Group has been making profits for the past three years and recording top-line growth as well. The company is currently enjoying strong growth, driven by robust growth momentum at Tinder, solid performances from Meetic and Match, as well as the recently acquired, PlentyOfFish.
However, the company is vulnerable to the cannibalization of users and revenues across its competing platforms. In fact, its average revenue per paying user was flat year over year in the last reported quarter, reflecting the shift of the company’s focus toward lower-paying brands, such as Tinder and OkCupid. The numbers were also adversely affected by appreciation of the U.S. dollar. These factors might affect the company’s top line in this quarter too.
Online dating is, by nature, a highly competitive and fragmented industry. New players and free services keep snatching market share, which makes it tough for established players to retain a foothold in the market. Further, the company has been struggling with monetization of its services, in the face of intensifying competition in the online dating space, with apps like Bumble, Hinge and Coffee Meets Bagel. This might just prove detrimental to the company’s top-line growth in the coming quarters.
Match Group had earlier anticipated year-over-year revenue growth of 15–20% in 2017. However, recent currency trends (strengthening U.S. dollar against the Euro and the Yen), will likely hurt those projections. Also, the company expects ARPPU growth to be flat in the near future.
In the last quarterly report, Match Group had projected revenues of $1.26–$1.31 billion, with an adjusted EBITDA of $450–$470 million for full-year 2017.
Match Group, Inc. Price, Consensus and EPS Surprise
Match Group, Inc. Price, Consensus and EPS Surprise | Match Group, Inc. Quote
Earnings Whispers
Our proven model does not conclusively show that Match Group will beat earnings estimates in this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. But that is not the case here as you will see below.
Zacks ESP: Earnings ESP for the company is 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are currently pegged at 10 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Match Group has a Zacks Rank #4 (Sell). As it is, we caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.
Stocks That Warrant a Look
Here are some companies that you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this quarter:
PBF Logistics L.P. has an Earnings ESP of +10.91% and a Zacks Rank #1. The partnership is expected to release earnings results on May 4. You can see the complete list of today’s Zacks #1 Rank stocks here.
Global Partners L.P. (GLP - Free Report) has an Earnings ESP of +233.33% and a Zacks Rank #1. The partnership is anticipated to release earnings on May 9.
NOW Inc. (DNOW - Free Report) has an Earnings ESP of +17.39% and a Zacks Rank #2. The company is likely to release earnings on May 3.
Sell These Stocks. Now.
Just released, today's 220 Zacks Rank #5 Strong Sells demand urgent attention. If any are lurking in your portfolio or Watch List, they should be removed immediately. These are sinister companies because many appear to be sound investments. However, from 1988 through 2016, stocks from our Strong Sell list have actually performed 6X worse than the S&P 500.
See today's Zacks "Strong Sells" absolutely free >>