Spark Networks's (LOV) Zoosk Acquisition Should Expand Trading Multiple

Canaccord Genuity analyst Austin Moldow reiterated a Buy rating and $14.00 price target on Spark Networks (NYSE: LOV) after the company announced its intention to acquire Zoosk, the second largest dating company in what the analyst believes will significantly increase Spark's scale and market share and improve investor sentiment.

The purchase price of $255M equates to $150M in stock and $105M in cash. The cash portion will be financed with a new senior secured credit facility.

The analyst stated "MTCH trades at 9.5x 2019 consensus revenue currently. One of the reasons why LOV is a top pick of ours this year is because we think this valuation gap will narrow, with LOV's multiple expanding as it takes share from Match and others. The acquisition of Zoosk accelerates this".

For an analyst ratings summary and ratings history on Spark Networks click here. For more ratings news on Spark Networks click here.

Shares of Spark Networks closed at $11.90 yesterday.

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