Online dating platform operator Match Group (MTCH) is implementing a turnaround strategy to revitalize its operations, which have stagnated due to weak numbers on its flagship dating app, Tinder. Last year, Tinder’s payer count dropped by 7% annually.
The company recently reported robust results for the second quarter, which led to MTCH stock rising more than 10% intraday. Should you consider investing in Match Group stock now?
About Match Group Stock
Based in Dallas, Texas, Match Group is a leading provider of digital technologies that help people make connections online. The company owns and operates some of the most popular dating apps and websites worldwide, including Tinder, Match.com, OkCupid, Hinge, Plenty of Fish, and BLK. Match Group has grown over the years through organic innovation as well as through acquisitions.
Moreover, the company’s suite of apps operates in over 40 languages, offering users a range of platforms across different geographies, demographics, and dating preferences. Match Group’s revenue model primarily revolves around subscription plans, in-app purchases, and advertising, with additional efficiency provided through product development and artificial intelligence (AI) driven matchmaking.
Its flagship dating app, Tinder, is the most downloaded dating app worldwide. Match Group has a market capitalization of $9.7 billion.
MTCH stock has posted modest gains as its payer growth has been under pressure for quite some time now. Over the past 52 weeks, MTCH stock has gained 12%, while the broader S&P 500 Index ($SPX) has gained 18% over the same period.
On the other hand, the company is currently undergoing a turnaround. Last year, activist investors Starboard Value and Elliott Management acquired stakes in the company, prompting it to reduce costs and enhance profitability. The stock is up 17% year-to-date (YTD), and popped more than 10% on Aug. 6 after the company reported robust Q2 results. MTCH stock also recently reached a 52-week high of $38.85 on Aug. 13.
Match Group’s valuation is currently at an attractive level. Its price sits at 14 times forward earnings, which is lower than the current industry average.
Match Group Reported Solid Q2 Earnings
On Aug. 5, Match Group reported its second-quarter results for fiscal 2025, which showed that the company is on a recovery path. While total revenues remained flat year-over-year (YOY), the revenue figure of $864 million was higher than the $854 million that analysts were expecting.
While payer count declined by 5% from the prior-year period, revenue per payer (RPP) increased by 5% annually to $20. EPS stood at $0.49, up 2% YOY and aligning with analyst estimates.
The company highlighted its three-phase turnaround strategy. Match Group reported that the “Reset” phase — which included installing a new management team, downsizing, and improving the product roadmap — has been completed. It has now entered the “Revitalize” phase, focusing on product acceleration at Tinder and maintaining strong momentum at Hinge.
Match Group expects to enter the “Resurgence” phase in 2026 and 2027, creating a conducive environment in Tinder to attract more Gen Z customers and Hinge to become a dating industry leader with AI-based capabilities.
The company expects Q3 revenue to be in the range of $910 million to $920 million, indicating 2% to 3% YOY growth and higher than the $890 million that analysts expect.
Wall Street analysts are optimistic about Match Group’s future earnings. They expect EPS to climb by 45% YOY to $0.74 for the third quarter. For the current fiscal year, EPS is projected to surge 16.5% annually to $2.60, followed by another 16.5% bump to $3.03 in the next fiscal year.
What Do Analysts Think About Match Group Stock?
Following Match Group's robust Q2 results, the company received multiple notable price target upgrades.
JPMorgan raised its price target from $28 to $33, while maintaining a “Neutral” rating. Analysts at the firm showed optimism about the company’s initial progress in its turnaround strategy. Citing the improvement in metrics and solid financial health, analysts at Evercore ISI also raised their price target from $32 to $38, while maintaining an “In Line” rating on MTCH stock.
Match Group remains soundly favored by Wall Street analysts with a consensus “Moderate Buy” rating overall. Of the 21 analysts rating the stock, seven rate it a “Strong Buy," one analyst suggests a “Moderate Buy,” and a majority of 13 analysts play it safe with a “Hold” rating. The consensus price target of $38.31 matches current levels. However, the Street-high price target of $49 indicates 28% potential upside from here.
Key Takeaways
Match Group’s turnaround is well underway, positioning the company for accelerated growth in the future. Moreover, the company remains robustly profitable. Therefore, while some analysts recommend caution, it may be prudent to keep the stock under consideration.
