Can Match Earnings Survive Facebook’s Impending Expansion?

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Match Group Inc. (NASDAQ: MTCH) is scheduled to release its most recent quarterly results after the markets close on Tuesday. The consensus estimates from Thomson Reuters are $0.23 in earnings per share (EPS) on $384.98 million in revenue. The first quarter of last year reportedly had $0.12 in EPS on $298.76 million in revenue.

The big news for Match is that recently Facebook said that it would be getting into the dating game. Zuckerberg noted that Facebook already connects people with their friends and family on its platform, so playing matchmaker is a natural progression.

At a cursory glance, it seems a dating service could increase the time that people spend on the Facebook platform, as well as cause big problems for its competitors in the online dating field.

Match’s Tinder app already uses a bevy of Facebook data to populate pictures, hobbies and likes on its platform. Facebook could easily take this model and remake it, similar to what the social media giant did when competing with Snap.

Zuckerberg noted that this will be used for long-term relationships, not just hookups. Also considering Facebook’s recent drama with Cambridge Analytica, this dating service is being built with privacy in mind, so that friends will not be able to see a person’s dating profile.

Match’s CEO scoffed at the thought of Facebook running a dating service, but investors sent shares down about 22% on this news.

Over the past 52 weeks, Match has outperformed the broad markets, with its stock up about 83%. In just 2018 alone, the stock is up about 13%.

A few analysts weighed in on Match ahead of the earnings report:

  • Merrill Lynch has a Buy rating but recently lowered its price target to $46 from $54.
  • Jefferies has a Hold rating with a $21 price target.
  • Guggenheim has a Neutral rating.
  • UBS has a Neutral rating and a $35 target price.
  • Wells Fargo has a Market Perform rating.
  • Piper Jaffray has an Overweight rating with a $48 price target.

Shares of Match were last seen at $35.50 on Tuesday, with a consensus analyst price target of $42.56 and a 52-week range of $16.57 to $48.65.