What Happened?
Shares of dating app company Match (NASDAQ: MTCH) fell 10.2% in the pre-market session after the company reported weak fourth quarter results. Its full-year revenue guidance missed significantly as its number of payers (the key debate for the stock) continued declining. This was extremely disappointing because management anticipated payer stabilization by the end of 2024, and it is apparent that this is not happening.
On the bright side, Match continues to generate cash and repurchase its shares at a cheap valuation, controlling what the company can control. Still, this was a weak quarter, and investors may be losing major trust in the company's ability to stabilize demand and subscriber trends.
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What The Market Is Telling Us
Match Group’s shares are not very volatile and have only had 6 moves greater than 5% over the last year. Moves this big are rare for Match Group and indicate this news significantly impacted the market’s perception of the business.
The biggest move we wrote about over the last year was 3 months ago when the stock dropped 18.7% on the news that the company reported underwhelming third-quarter earnings that has the market questioning its turnaround story. Match provided revenue guidance for the next quarter which missed analysts' expectations, and its revenue growth was quite weak. The company stated that "Tinder MAU was down 9% Y/Y in Q3, which was the same rate of decline as in Q2, falling short of our expectations for continued improvement in Y/Y trends. From mid-September through October, we saw more press re on new users (registrations and reactivations) than we expected, which has led to pressure on MAU."
On the other hand, it was good to see Match Group beat analysts' EBITDA expectations this quarter. Overall, this was a challenging quarter, and the turnaround is frankly not going well.
Match Group is up 3.2% since the beginning of the year, but at $33.65 per share, it is still trading 12.9% below its 52-week high of $38.62 from October 2024. Investors who bought $1,000 worth of Match Group’s shares at the IPO in June 2020 would now be looking at an investment worth $318.46.
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