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Factors Likely to Influence Match Group's (MTCH) Q3 Earnings

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Match Group, Inc. (MTCH - Free Report) is scheduled to release third-quarter 2019 results on Nov 5.

Notably, the company surpassed the Zacks Consensus Estimate for earnings in the trailing four quarters, with an average positive earnings surprise of 18.99%.

What do the Estimates Say?

Match Group expects third-quarter 2019 revenues between $535 million and $545 million. The Zacks Consensus Estimate for revenues is currently pegged at $539.25 million, indicating an improvement of 21.5% from the year-ago quarter.

The consensus for earnings is pegged at 47 cents per share, unchanged for the last 30 days. The figure suggests growth of 20.5% from the year-ago reported figure.

Q2 at a Glance

Match Group had delivered second-quarter 2019 adjusted earnings of 49 cents per share, which beat the Zacks Consensus Estimate by 8.9%.

Revenues of $497.9 million comfortably surpassed the Zacks Consensus Estimate of $487 million.

Strong product portfolio comprising Tinder, Match.com, OkCupid (acquired in February 2011), Meetic, PlentyOfFish (acquired in July 2015) and Hinge are aiding Match Group's financial performance.



Notably, shares of Match Group have returned 70.6% year to date, significantly outperforming the industry’s rise of 6.3%.

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

Factors Expected to Influence Key Metrics in Q3

Solid contribution from Tinder is expected to have driven average subscriber base, which is likely to reflect in the top line in the third-quarter.

The Zacks Consensus Estimate for total average subscribers is pegged at 9.591 million for the third quarter, indicating an improvement of 18.6% from the prior-year quarter. Notably, the corresponding figure in the second quarter came in at 9.08 million.

Robust portfolio of online dating services and sturdy synergies from Meetic, Match and PlentyOfFish bode well.

Moreover, robust adoption of Tinder Gold subscription package is likely to have aided Match Group to boost Average Revenue per Subscriber or ARPU, which in turn is expected have driven the third-quarter revenues.

The Zacks Consensus Estimate for ARPU is pegged at $0.60 for the third quarter, indicating an improvement of 5.3% from the year-ago reported figure. Notably, the corresponding figure in the second quarter came in at $0.58.

In the quarter under review, Match Group is anticipated to have benefited from growing clout of Tinder and OkCupid in India, amid growing Internet penetration in South-East Asia. Consequently, this is likely to have bolstered International revenues in the third quarter. Notably, in the second quarter, OkCupid downloads soared 700% year over year in India.

The company rolled out Tinder Lite in Vietnam in the third quarter, which is expected to have expanded user base, and consequently aided third-quarter performance.
 

Match Group, Inc. Price and EPS Surprise

Match Group, Inc. Price and EPS Surprise

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

Per Reuters, Match Group’s Tinder also concluded filming on first television series with multiple episodes revolving around an “apocalyptic” storyline, in late August. Increasing expenditure on product enhancements with innovative initiatives amid competition from Facebook’s (FB - Free Report) Facebook Dating is likely to have impacted profitability in the third quarter. Notably, the social-media giant rolled out Facebook Dating in the United States in September, 2019.

What Our Model Says

According to the Zacks model, a 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.

Although Match Group has a Zacks Rank #2, an Earnings ESP of 0.00% makes surprise prediction difficult. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks to Consider

Here are a couple of stocks that you may consider, as our proven model shows that these have the right combination of elements to post an earnings beat this quarter.

Activision Blizzard, Inc (ATVI - Free Report) has an Earnings ESP of +24.30% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

iHeartMedia, Inc. (IHRT - Free Report) has an Earnings ESP of +3.17% and a Zacks Rank #2.

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