By Angela Palumbo
Match Group stock was sinking Wednesday after the parent company for dating apps Tinder and Hinge reported a drop in paying users.
Shares of Match were falling 5.1% to $29.89 and had earlier been on pace to hit a record closing low. The stock, which has now dropped 18% this year.
Match said in its letter to shareholders on Tuesday that paying users of its dating platforms declined 6% in the first quarter to 14.93 million. Analysts surveyed by FactSet were expecting 15 million payers.
For Tinder, payers declined 9% from the prior year to just under 10 million. Payers for Hinge increased 31% to 1.4 million.
"Tinder has been facing pressures over the past several quarters on both its user and Payer bases. Some of these pressures have been due to deliberate actions we have taken, including trust & safety efforts, as well as our decision to exit two countries," the company said.
Match also said it expects second-quarter revenue to be between $850 million to $860 million, when analysts expected revenue of $883.8 million.
"While we're optimistic the relatively new management team will navigate the current waters with ease, we believe there is too much uncertainty at the moment to warrant a Buy rating," Stifel analyst Mark Kelley wrote in a research note. He rates the stock as a Hold with a $39 price target.
Wells Fargo analyst Ken Gawrelski also rates the stock as Equal Weight with a $31 price target. He said that he believed optimistic investors were hoping for more positive commentary on Tinder engagement or additional product details, "which didn't materialize in the shareholder letter. Without qualitative positives to offset lower [estimates], we expect shares to underperform."
It wasn't all bad news for Match, though. The company reported first-quarter adjusted earnings of 44 cents a share on revenue of $859.65 million, compared with earnings of 42 cents a share on revenue of $787.1 million in the same period last year. Analysts surveyed by FactSet were expecting earnings of 41 cents a share on revenue of $855.8 million.
Write to Angela Palumbo at angela.palumbo@dowjones.com
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(END) Dow Jones Newswires
May 08, 2024 11:07 ET (15:07 GMT)
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