Match Group (MTCH) is focused on turning around Tinder's performance, but the structural headwinds affecting dating in general are already embedded in the stock price, RBC Capital Markets said in a note emailed Wednesday.
The company believes it needs to maximize product improvements to Tinder to boost the platform's monthly active users, which is the first step to recovery, RBC analysts said, citing the company's management in an investor meeting.
The analysts said that the company is particularly excited about a new "double date" feature driving interactions on the platform in six to 12 months.
Tinder's new Face Check feature initially reduced revenue by 10% and has since been optimized to low single digits, while other product enhancements will likely affect the top line, the analysts added.
However, the analysts noted that the company is still aiming to get monthly active user numbers back into growth, which should naturally boost monetization.
The analysts said that any positive signal regarding Tinder's user trends could trigger an upward re-rating of the stock.
RBC kept the company's stock rating at outperform and price target at $37.
Price: 33.88, Change: -0.14, Percent Change: -0.41
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