Match Group's (MTCH) medium-term prospects remain the same based on product
innovation despite a "choppy" Tinder turnaround, Morgan Stanely said in a note Tuesday.
The analysts said that the weak point in Q3 was a 9% year-over-year decline in Tinder's monthly active users. However, this may be due more to the impact of iOS 18 changes than a sign of worsening trends, they said.
"We think the medium-term bull case is unchanged: product improvements increase user satisfaction and engagement leading to stabilization of the user base. We see many opportunities for the product to improve with strength at Hinge demonstrating the potential upside of finding product-market fit," the analysts said in the note.
However, it will take time and strong execution to identify key improvements that enhance the product experience and boost user sentiment and restart user growth, the analysts added.
With Match Group's investor day on Dec. 11 being the next major event, there is a lot of debate on how the company will present its three-year targets. Expectations for future revenue guidance are wide due to the uncertainty around Tinder's success, Morgan Stanley said, adding that regardless of the guidance, they believe the market will need clear evidence of improvement at Tinder before becoming more optimistic.
Morgan Stanley cut its price target on Match Group to $33 from $36 while keeping its equal-weight rating.
Shares of the company fell about 4% in recent trading.
Price: 30.67, Change: -1.27, Percent Change: -3.98
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