JPMorgan analyst Cory Carpenter downgraded Match Group (NASDAQ:MTCH) from Overweight to Neutral and lowered the price target from $40 to $33.
Match is the leading online dating platform with an estimated ~50% share of global dating users across its portfolio of brands. Tinder is the largest and most profitable dating app globally and Hinge is the fastest-growing scaled dating brand.
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The rerating reflects Carpenter's expectation for muted growth in the online dating industry in 2025 and limited visibility in the timing and magnitude of the Tinder turnaround. The analyst noted the downside is limited due to undemanding valuation, low investor expectations, dividends and share buybacks, and activism.
Heading into 2024, Carpenter expected Tinder payers to stabilize as the focus shifted from price optimizations to product and marketing.
However, the Tinder turnaround has proven more difficult than expected, and much work remains to return Tinder to sustainable growth.
The analyst noted Tinder user and revenue trends need to improve for Match shares to rerate higher, which appears increasingly unlikely in 2025.
Indeed, Tinder revenue and users will likely worsen before improving, with a return to growth not forecasted until 2027.
Carpenter updated his model following the investor day last week, with his Tinder direct revenue estimate reduced by 10% in 2026. This reflects a revenue decline of 6% in 2025, flat in 2026, and up 2% in 2027. The analyst still noted Tinder stability is possible over time through AI-driven product innovation, but it remains early, and execution is critical.
The price target is based on nine times Carpenter's 2025E AOI of $1.3 billion, which is a discount to Grindr Inc (NYSE:GRND), which trades at 18 times, but a premium to Bumble Inc (NASDAQ:BMBL), which trades at six times.
MTCH Price Action: Match Group stock is up 0.57% at $31.76 at publication Wednesday
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