Match Group (MTCH) PT Raised to $56 at Barclays

Barclays analyst Ross Sandler raised the price target on Match Group (NASDAQ: MTCH) to $56.00 (from $42.00) while maintaining a Equalweight rating.

Analyst comments: "MTCH reported 4Q Tinder net-adds, revenue and EBITDA that were +53k, +3%, and +5% above our estimates, respectively, and guided 1Q Tinder above consensus. Stepping back, Tinder is the key to the bull case and these net-adds should ease any concerns the investment community may have had about the Gold decay curve. It seems like Tinder has reached a new velocity and is benefitting from global dating network effects. Tinder drives 90% of the value of MTCH, so we are encouraged by this trend and have raised our Tinder revenue estimates and our price target. We think the juice at Tinder from Gold and other products is getting a little late in the cycle, but the company continues to surprise us to the upside."

As a reminder, MTCH reported fourth quarter 2018 earnings yesterday after market close. Q4 2018 highlights:

• Total Revenue grew 21% over the prior year quarter to $457 million, driven by 17% Average Subscriber growth and 4% ARPU growth.
• Average Subscribers increased to 8.2 million, up from 7.0 million in the prior year quarter.
• Tinder Average Subscribers were 4.3 million in Q4 2018, increasing 233,000 sequentially and 1.2 million year-over-year.
• Operating income was $151 million, an increase of 18% over the prior year quarter, and Adjusted EBITDA increased 15% over the prior year quarter to $176 million.
• For the year ended December 31, 2018, Operating Cash Flow increased 88% to $603 million, and Free Cash Flow increased 96% to $573 million.

Shares of MTCH trade up +4.22% in response to earnings reported yesterday and QQQ trades down -1.64% in late afternoon trading.

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