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Match Group (MTCH) to Post Q2 Earnings: Is a Beat in Store?

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Match Group, Inc. (MTCH - Free Report) is set to report second-quarter 2021 results on Aug 3.

The Zacks Consensus Estimate for revenues is currently pegged at $690.5 million, indicating an increase of 24.32% from the year-ago quarter.

For the second quarter, the Zacks Consensus Estimate for earnings has been increased 1.8% to 57 cents per share over the past 30 days.

The company’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters, while missing in one, the average surprise being 12.78%.

Let’s see how things are shaping up for this announcement.

Match Group Inc. Price and EPS Surprise

Match Group Inc. Price and EPS Surprise

Match Group Inc. price-eps-surprise | Match Group Inc. Quote

Factors to Consider

Match Group’s second-quarter top line is expected to have benefited from continued momentum at Tinder and solid performance of other apps like Hinge, Pairs and OkCupid, which drove 23% year-over-year increase in Match Group’s revenues to $667.6 million in the first quarter of 2021.

Introduction of Tinder Platinum subscription and new revenue features like in-app virtual currency to suit changing preferences of its global user base are expected to have boosted direct revenues from Tinder in the to-be-reported quarter.

Addition of à la carte features and price optimization for Hinge app, higher premium subscription purchases at Tinder and OkCupid as well as increases in live video streaming for PlentyOfFish app are expected to have been key catalysts in driving subscriber growth in the United States in the second quarter.

For the quarter ended Mar 31, 2021, the company saw an increase in the average subscriber base of 12% to 11.1 million. Additionally, the average revenues per user improved 9% year over year. This trend is expected to be have continued in the to-be-reported quarter as well.

In the second quarter, Match Group joined forces with the White House for the promotion of COVID-19 vaccinations across its top-notch U.S. brands – Tinder, Match, OkCupid, Hinge, Plenty of Fish, BLK and Chispa.

Opting for vaccination and proactively showcasing the status on the profiles are seen as crucial compatibility factors as well as important steps for in person dating by the users. This promotional campaign is expected to have increased user activity on its platforms in the quarter to be reported.

Further, the acquisitions of South Korea-based leading social discovery and video technology company, Hyperconnect, as well as non-dating apps like Ablo are expected to have aided international revenues, thereby driving top-line growth in the quarter.

Hyperconnect runs two social discovery apps namely Azar and Hakuna Live. Azar, a 1:1 live video and voice chat app, has prominent presence across Asia and increasing user base in Europe. Hakuna Live, an app enabling one to many or group live video, audio, and avatar-based streaming, has strong presence in South Korea, Japan and other Asian markets.

The Ablo app helps people make to friends around the world. Moreover, the company continues to expand operations for apps like OkCupid across international markets.

However, increasing expenditure on marketing and product enhancements with innovative initiatives amid intense competition is likely to have weighed on second-quarter profitability.

The company is expected to have spent incremental $40 million on sales and marketing in the second quarter of 2021.

What Our Model Says

Per the Zacks model, the company is likely to beat estimates this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. That is the case here.

Match Group has an Earnings ESP of +2.53% and a Zacks Rank #2. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Other Stocks to Consider

Here are some other companies worth considering as these have the right combination of elements to beat on earnings this reporting cycle:

Avient Corporation (AVNT - Free Report) has an Earnings ESP of +2.47% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

AbbVie Inc. (ABBV - Free Report) has an Earnings ESP of +0.56% and a Zacks Rank #3.

Aon plc (AON - Free Report) has an Earnings ESP of +3.05% and a Zacks Rank #3.

In-Depth Zacks Research for the Tickers Above

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Aon plc (AON) - free report >>

AbbVie Inc. (ABBV) - free report >>

Match Group Inc. (MTCH) - free report >>

Avient Corporation (AVNT) - free report >>