Online Dating Usage Rising in Major Countries; Match Group (MTCH) and Bumble (BMBL) Expected to Benefit - Cowen

March 8, 2021 7:37 AM EST
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Cowen analyst John Blackledge shared insights from the company’s latest proprietary surveys of online dating in today’s note sent to clients.

The data indicates that online dating usage jumped significantly in the US, UK, and Germany in December last year, which is likely to yield higher monetization for the major brands - Match Group (NASDAQ: MTCH) that owns Tinder and Hinge, as well as Bumble ((NASDAQ: BMBL).

“Our survey work in the US, UK, Germany & Japan has provided us with increased confidence in our dating industry outlook. As a result, we are raising our long-term MTCH forecast,” Blackledge said.

The analyst raised the price target on MTCH to $190.00 per share (vs. $175 prior) and maintained an “Outperform” rating.

“Nearly all the top dating apps including Tinder, Hinge and Bumble saw meaningful MAU penetration growth in Dec '20. Tinder performed particularly well, with the highest increase in users in every market except Japan, where MTCH owned Pairs was the leader.”

“We can see that across all of our survey markets online dating adoption is highest among respondents under 35 with adoption rates approaching 50% among certain cohorts. This dynamic isn't surprising given the timing of the rise of smartphones and Tinder's launch in 2012, and we believe that there is an opportunity for dating app adoption to age up over time as these mobile first consumers age,” the analyst adds.

Blackledge also started the coverage of Bumble with an “Outperform” rating as its analyst John Blackledge believes the company is poised to benefit from strong secular offline-to-online dating trends. He set a $70.00 price objective on BMBL.

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