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Match Group (MTCH) Provides Update Amid Coronavirus Outbreak

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Match Group, Inc. (MTCH - Free Report) recently provided an update regarding the impact of the global coronavirus pandemic on its business.

The company expects first-quarter 2019 results to be in the low end of its previous guidance range of $545-$555 million. The Zacks Consensus estimate for first quarter revenues is currently pegged at $549.4 million.

The company noted decline in new users over the age of 30 years, especially in countries that have been hit the hardest by COVID-19.

However, Match Group witnessed increased engagement for its apps among users under the age of 30, with a significant number of people using Tinder’s Passport feature to connect with users from other countries. This has prompted the company to make the feature free for all users.

There is a growing traction for Hinge as well, with messages increasing 30% in March compared with the last two months. In response, the app launched a ‘Dating from Home’ feature and plans to introduce a ‘Date Ready’ feature that enables live video dating.

Considering these factors, despite believing sequential revenue growth in the second quarter will prove to be a challenge, the company expects year-over year growth for second-quarter revenues.

Match Group, Inc. Price and Consensus

Video Dating to Drive Long-Term Growth

Amid the coronavirus-related uncertainty, Match Group’s focus on adding video dating capabilities to its apps bodes well.

Notably, the company has already integrated life streaming features to Plenty of Fish and Twoo, which effectively enables users to conduct live dates over video. Match Group’s peers aren’t far behind, with Bumble and Jewish dating app — JWed — also adopting video and voice features.

As people have been forced to stay at home and maintain social distancing, it has become impossible to go on face to face dates with potential partners. Thus, app users are using new methods of dating like dinner dates over Zoom Video (ZM - Free Report) and watching Netflix (NFLX - Free Report) together from their own homes.

As a result, video dating capabilities are likely to attract more users to Match Group’s dating apps and aid the company in maintaining dominance in the online dating market. Per Statista data, the market is expected to witness a CAGR of 4.3% between 2020 and 2024.

Further, the pandemic is expected to push people to make a permanent shift towards online dating, which bodes well for the company’s prospects over the long haul.

Zacks Rank & A Key Pick

Currently, Match Group carries a Zacks Rank #3 (Hold).

A better-ranked stock in the broader technology sector is CyberOptics Corporation , which sports a Zacks Rank #1 (Strong Buy), at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The long-term earnings growth rate for CyberOptics is currently pegged at 12%.

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