Match Group Inc (Nasdaq: MTCH) investors need some reassurance when the company reports its first-quarter earnings numbers on May 8. Analysts are looking for some impressive growth numbers from Match, but investors will likely be more concerned about management’s commentary related to Facebook’s ( FB) recently announced plan to offer a dating service.
Analysts are expecting Match to report first-quarter earnings per share of 23 cents on revenue of $384.9 million. Those numbers would represent 91.6 percent earnings growth and 28.8 percent revenue growth compared to the first quarter of 2017.
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Investors will also be watching Tinder numbers closely. Last quarter, Match reported a record 544,000 new paying Tinder customers, bringing Tinder’s total user count to more than 3 million. Match reported 7 million total users across all of its online dating platforms, which include OkCupid and Match.com.
Last week, MTCH stock plummeted more than 20 percent after Facebook CEO Mark Zuckerberg said the company is testing a dating service that is designed for “building long-term relationships, not just for hook-ups.”
Match CEO Mandy Ginsberg wasted little time in going on the offensive against the new threat, taking thinly veiled shots at Facebook’s recent Cambridge Analytica data scandal.
“We’re surprised at the timing given the amount of personal and sensitive data that comes with this territory,” Ginsberg said in a statement.
Some Wall Street analysts see Facebook as a deal-breaker for Match investors. Jefferies analyst Brent Thill downgraded MTCH stock from “buy” to “hold” following the Facebook announcement.
“While the Facebook news won’t impact short-term financial results, we are downgrading to Hold based on uncertainty around Facebook’s product and its long-term impact on Match’s business,” Thill said.
Even Match bulls, such as Bank of America analyst Nat Schindler, see Facebook as a threat.
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“Given the rapid growth of Tinder in 4Q17 and expected growth in 1Q18, we are confident Match will come in ahead of full year revenue 2018 guidance, which implies an incremental $219 million in revenue at the midpoint in ’18 over ’17,” Schindler says. “We continue to see upside for Match but believe a significant premium multiple is not warranted given the evolving competitive risks.”
In addition to the “hold” rating, Jefferies has a $40 price target for Match. Bank of America has a “buy” rating and $46 target for MTCH stock.
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MTCH Stock: What to Expect From Match Group Inc Earnings originally appeared on usnews.com
