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Why Is Match Group (MTCH) Down 7.4% Since Last Earnings Report?
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A month has gone by since the last earnings report for Match Group (MTCH - Free Report) . Shares have lost about 7.4% 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 its most recent earnings report in order to get a better handle on the important drivers.
Match Group Reports Loss in Q4, Revenues Rise Y/Y
Match Group reported a fourth-quarter 2021 loss of 60 cents per share against earnings of 50 cents reported in the year-ago quarter.
The Zacks Consensus Estimate for fourth-quarter 2021 earnings was pegged at 64 cents per share.
Revenues of $806 million increased 24% year over year but lagged the Zacks Consensus Estimate of $819 million.
Excluding the forex, the top line increased 26% year over year to $817.9 million.
Activity and engagement across all brands have been high since the COVID-19 outbreak. However, Match Group noted that some countries in Asia like Japan, which are important markets, were witnessing a slow COVID recovery. Also, the emergence of the new variant Omnicron reduced mobility in many markets starting early December.
Quarter in Detail
In the fourth quarter, the number of total payers increased 15% to 16.2 million. The number of total payers from the Americas, Europe, and the Asia Pacific (APAC) and Other increased 10%, 10% and 36%, respectively, on a year-over-year basis.
Total revenue per payer (RPP) increased 8% year over year to $16.16 million. Region-wise, RPP from the Americas, Europe, and APAC and Other increased 10%, 6% and 7%, respectively.
Direct revenues from the Americas were up 21% to $399.8 million. Direct revenues from Europe increased 16% to $218.5 million, while APAC and Other reported a 46% surge in direct revenues to $169.3 million.
Direct revenues from Tinder jumped 23% year over year. The total number of payers for Tinder rose 18% year over year to 10.6 million, while Tinder RPP increased 4% in the fourth quarter.
Direct revenues from non-Tinder brands collectively increased 26% on a year-over-year basis. Non-Tinder brands witnessed 9% growth in the total number of payers to 5.7 million as well as a 16% increase in RPP.
Operating Details
Total operating costs and expenses increased 31% year over year to $574.153 million in the fourth quarter. The upside can be attributed to the increased cost of revenues, selling and marketing expenses, product development, and general and administrative expenses.
As a percentage of revenues, total operating costs and expenses expanded 400 bps year over year to 71% in the reported quarter.
Adjusted operating income was $290 million, up 18% year over year. Adjusted operating margin contracted 200 basis points (bps) year over year to 36%.
Balance Sheet
As of Dec 31, 2021, Match Group had cash and cash equivalent balance of $815.38 million compared with $523.2 million as of Sep 30.
As of Dec 31, 2021, Match Group had a long-term debt of $3.829 billion compared with $3.848 billion as of Sep 30, 2021.
As of Dec 31, 2021, Match Group reported $1.3 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 2022 revenues to be $790-$800 million, indicating 18-20% growth from the prior-year quarter’s reported number. The Zacks Consensus Estimate is currently pegged at $818.82 million.
Adjusted operating income for the first quarter is anticipated to be $260-$265 million.
For 2022, Match Group expects revenues to grow 15-20% from the year-earlier quarter’s reported figure. Revenues from HyperConnect are expected to grow 0.5-1%.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates flatlined during the past month.
The consensus estimate has shifted -5.98% due to these changes.
VGM Scores
Currently, Match Group has an average Growth Score of C, however its Momentum Score is doing a bit better with a B. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
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 7.4% Since Last Earnings Report?
A month has gone by since the last earnings report for Match Group (MTCH - Free Report) . Shares have lost about 7.4% 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 its most recent earnings report in order to get a better handle on the important drivers.
Match Group Reports Loss in Q4, Revenues Rise Y/Y
Match Group reported a fourth-quarter 2021 loss of 60 cents per share against earnings of 50 cents reported in the year-ago quarter.
The Zacks Consensus Estimate for fourth-quarter 2021 earnings was pegged at 64 cents per share.
Revenues of $806 million increased 24% year over year but lagged the Zacks Consensus Estimate of $819 million.
Excluding the forex, the top line increased 26% year over year to $817.9 million.
Activity and engagement across all brands have been high since the COVID-19 outbreak. However, Match Group noted that some countries in Asia like Japan, which are important markets, were witnessing a slow COVID recovery. Also, the emergence of the new variant Omnicron reduced mobility in many markets starting early December.
Quarter in Detail
In the fourth quarter, the number of total payers increased 15% to 16.2 million. The number of total payers from the Americas, Europe, and the Asia Pacific (APAC) and Other increased 10%, 10% and 36%, respectively, on a year-over-year basis.
Total revenue per payer (RPP) increased 8% year over year to $16.16 million. Region-wise, RPP from the Americas, Europe, and APAC and Other increased 10%, 6% and 7%, respectively.
Direct revenues from the Americas were up 21% to $399.8 million. Direct revenues from Europe increased 16% to $218.5 million, while APAC and Other reported a 46% surge in direct revenues to $169.3 million.
Direct revenues from Tinder jumped 23% year over year. The total number of payers for Tinder rose 18% year over year to 10.6 million, while Tinder RPP increased 4% in the fourth quarter.
Direct revenues from non-Tinder brands collectively increased 26% on a year-over-year basis. Non-Tinder brands witnessed 9% growth in the total number of payers to 5.7 million as well as a 16% increase in RPP.
Operating Details
Total operating costs and expenses increased 31% year over year to $574.153 million in the fourth quarter. The upside can be attributed to the increased cost of revenues, selling and marketing expenses, product development, and general and administrative expenses.
As a percentage of revenues, total operating costs and expenses expanded 400 bps year over year to 71% in the reported quarter.
Adjusted operating income was $290 million, up 18% year over year. Adjusted operating margin contracted 200 basis points (bps) year over year to 36%.
Balance Sheet
As of Dec 31, 2021, Match Group had cash and cash equivalent balance of $815.38 million compared with $523.2 million as of Sep 30.
As of Dec 31, 2021, Match Group had a long-term debt of $3.829 billion compared with $3.848 billion as of Sep 30, 2021.
As of Dec 31, 2021, Match Group reported $1.3 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 2022 revenues to be $790-$800 million, indicating 18-20% growth from the prior-year quarter’s reported number. The Zacks Consensus Estimate is currently pegged at $818.82 million.
Adjusted operating income for the first quarter is anticipated to be $260-$265 million.
For 2022, Match Group expects revenues to grow 15-20% from the year-earlier quarter’s reported figure. Revenues from HyperConnect are expected to grow 0.5-1%.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates flatlined during the past month.
The consensus estimate has shifted -5.98% due to these changes.
VGM Scores
Currently, Match Group has an average Growth Score of C, however its Momentum Score is doing a bit better with a B. However, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Match Group has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.