Match Group a Dating Hook-Up for Online Traders?

Batman viewing online dating on phone

Dating site profiles give Moms a glimpse of background, physical appearance and personality. Sometimes what is left out is more significant. Putting hearts on the line meeting complete strangers can take a lot of time and energy.

Only a few years ago online dating was that thing many assumed that only desperate or creepy people did, and no-one dared admit to it. Today, it’s the easiest way to meet new people and everyone is tuning in.

Dating Pioneer

Match Group https://ir.mtch.com/overview/default.aspx (MTCH) , is the parent of Tinder, Plenty of Fish, OK Cupid and Our Time (for Moms over 50) online dating sites.

Match pioneered the concept of online dating over 20 years ago with products available in more than 190 countries, with a subscriber count over 4.1 Million lonely hearts.

Online dating is one of the fastest growing internet industries and remains grossly misunderstood by Wall Street. Untapped markets, widening moats, and huge free cash flow are the common traits of the winners of this sector. Online dating industry leaders are true secular growers.

Asian Opportunities

Match recently restructured its leadership team to prioritize its growth in Asian markets. MTCH has grown revenue at 15% over the previous 5 years and expects to do the same in the next 5 years.

This will be done by aggressively entering the Asian market, which has a 400 Million “singles” market opportunity. There are major risks, such as lawsuits and failing to execute on the growth trajectory because of competitors and cultural differences. That said, if the company does succeed, the current valuation of 10.9 times sales and 39 time earnings is compelling.

Competition

Momo Inc. http://ir.immomo.com/investor-overview ,(MOMO) the Chinese mobile-based social platform acquired the popular dating site Tantan, the leading Chinese dating site and considered the “Tinder of China”.

Tantan has delivered astounding growth, with over 5 Million paid users and growing, and a significant presence in India. MOMO (Nasdaq) shares hover $22.50 – $48.63. Momo already has a entire business going about the same size as Match Group’s.

Bumble – privately European owned by Magic Lab and based in Texas, is a dating app that puts the onus on women to initiate a conversation. Bumble has boosted spending to $100 Million to face-off against Tinder, representing a shot from cupid’s arrow at rival Match.

Match Group Growth

Match remains the most direct play on the turbulent world of dating sites. Tinder continues to be a powerful growth engine for Match with new added products offering daters a bundle of features and upgrades that require paid subscriptions, adding to Tinder’s parent’s bottom line.

Match Group and Momo are the two secular growers deserving prime attention. Match still has irons in the fire with growth opportunities beyond the United States.

Mom’s Takeaway

MTCH will audiocast a review of its 2nd Quarter results on Wednesday, August 7, 2019 @ 8:30 a.m. EST.

Match Group’s August 3, 2019 share price was $ 75.19. Are you a BULL or a BEAR ?

Bronze bull and bear wrestling

If you’re a Bullish Mom and think Match will go up, try the Expiration Date December 20- CALL $ 75.00 Bid;  and $ 70.00 Ask strike prices.  Premium is $ 3.70 debit to pay = Long Call Vertical Spread on http://TDAmeritrade

On the other hand, Mom, if you think MTCH is bearish and will go down, try the Expiration Date December 20 – PUT $ 70.00 Ask;  and $ 65.00 Bid strike prices. Premium is $ 2.90 debit to pay = Long Put Vertical Spread on http://tastyWorks.com

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