In December 2018, Match Group, Inc. (NASDAQ:MTCH) released its most recent earnings announcement, which confirmed that the business gained from a strong tailwind, leading to a double-digit earnings growth of 34%. Below, I’ve laid out key numbers on how market analysts view Match Group’s earnings growth trajectory over the next few years and whether the future looks even brighter than the past. I will be using net income excluding extraordinary items in order to exclude one-off volatility which I am not interested in.
Analysts’ expectations for this coming year seems pessimistic, with earnings decreasing by -2.2%. But in the following year, there is a complete contrast in performance, with arriving at double digit 21% compared to today’s level and continues to increase to US$721m in 2022.
Although it is informative knowing the growth each year relative to today’s level, it may be more insightful to determine the rate at which the business is moving every year, on average. The benefit of this method is that it ignores near term flucuations and accounts for the overarching direction of Match Group’s earnings trajectory over time, which may be more relevant for long term investors. To calculate this rate, I’ve appended a line of best fit through the forecasted earnings by market analysts. The slope of this line is the rate of earnings growth, which in this case is 15%. This means, we can assume Match Group will grow its earnings by 15% every year for the next couple of years.
For Match Group, there are three fundamental aspects you should further research:
- 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.
- Valuation: What is MTCH 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 MTCH is currently mispriced by the market.
- Other High-Growth Alternatives: Are there other high-growth stocks you could be holding instead of MTCH? Explore our interactive list of stocks with large growth potential to get an idea of what else is out there you may be missing!
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at email@example.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.