Match Group, Inc. (NASDAQ:MTCH): Earnings To Drop Next Year

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Based on Match Group, Inc.’s (NASDAQ:MTCH) recently announced earnings update on 31 December 2018, analyst forecasts appear to be pessimistic, with earnings expected to decline by -1.2% in the upcoming year compared with the past 5-year average growth rate of 34%. Presently, with latest-twelve-month earnings at US$478m, we should see this fall to US$473m by 2020. Below is a brief commentary on the longer term outlook the market has for Match Group. For those interested in more of an analysis of the company, you can research its fundamentals here.

Check out our latest analysis for Match Group

How will Match Group perform in the near future?

The longer term view from the 17 analysts covering MTCH is one of positive sentiment. Broker analysts tend to forecast up to three years ahead due to a lack of clarity around the business trajectory beyond this. To get an idea of the overall earnings growth trend for MTCH, I’ve plotted out each year’s earnings expectations and inserted a line of best fit to determine an annual rate of growth from the slope of this line.

NASDAQGS:MTCH Future Profit February 11th 19
NASDAQGS:MTCH Future Profit February 11th 19

By 2022, MTCH’s earnings should reach US$721m, from current levels of US$478m, resulting in an annual growth rate of 14%. This leads to an EPS of $2.33 in the final year of projections relative to the current EPS of $1.73. Margins are currently sitting at 28%, approximately the same as previous years. With analysts forecasting revenue growth of 0.51276 and MTCH’s net income growth expected to roughly track that, this company may add value for shareholders over time.

Next Steps:

Future outlook is only one aspect when you’re building an investment case for a stock. For Match Group, I’ve compiled three pertinent aspects you should further examine:

  1. Financial Health: Does it have a healthy balance sheet? Take a look at our free balance sheet analysis with six simple checks on key factors like leverage and risk.
  2. Valuation: What is Match Group worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether Match Group is currently mispriced by the market.
  3. Other High-Growth Alternatives : Are there other high-growth stocks you could be holding instead of Match Group? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.