Two Perspectives on Match / IAC Stock

Analyses of Match Group & IAC dating stock have been mixed this week, with some arguing that the companies are well placed to increase in valuation and others expecting a plateau.

In Markets Insider, Ethel Jiang reports on Jefferies analysts’ take that IAC is the “unsung hero of the internet”.

Tinder has under 4 million paid subscribers, which is less than the amount of college freshmen starting this year in the US alone.

There may be far more scope for monetisation in that space, therefore – something IAC is well placed to capitalise on with the introduction of Tinder U.

The Jefferies line is that although IAC has outperformed in recent quarters, increasing its valuation over 50%, it is still undervalued and a ‘buy’ rated stock.  

Erich Reimer, writing in Seeking Alpha, argues against this view. He says “Match Group’s ‘boom times’ look like they are over”.

In his opinion, Match has completed its sudden rally from the Facebook Dating slump. Now it has regained its previous position, future growth will be slow.

Tinder continues to see good growth and Match is making acquisitions in good areas, but these are well known trends and investors have priced them in.

Subscriptions are up over 80% year-on-year, for example, but the stock price is up 120% year-on-year as well.

The piece reads: “For investors, the company now is no longer the clear buy it was back when I discussed it after its post-Facebook drop, and has more downside risk than back then. It can still grow, but the fundamentals guiding it have changed and as has its price.”

IAC holds 81.2% economic interest and 97.6% voting interest in Match Group.

Read more on IAC here, and on Match here.