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Match Group (MTCH) Soars 10.3%: Is Further Upside Left in the Stock?

Match Group (MTCH) saw its shares surge in the last session with trading volume being higher than average. The latest trend in earnings estimate revisions may not translate into further...

This story originally appeared on Zacks

Match Group (MTCH) shares rallied 10.3% in the last trading session to close at $175.53. This move can be attributable to notable volume with a higher number of shares being traded than in a typical session. This compares to the stock's 3.6% gain over the past four weeks.

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The increase in share price can be attributed to the announcement made by Alphabet’s Google in a blog post that it was lowering service fees for subscriptions on Google Play to 15% from 30% charged earlier, beginning from Jan 1, 2022.

Match Group is the parent organization of the online dating app Tinder. The company is benefiting from the increasing activity and engagement seen across its apps like Tinder, Hinge, Meetic, Pairs and OkCupid since the COVID-19 outbreak, especially across western markets

In the last reported quarter, the company’s revenues of $707.8 million increased 27% year over year and the number of total payers soared 15% to 15 million.

Direct revenues from Tinder jumped 26% year over year. The total number of payers for Tinder rose 17% year over year to 9.6 million.

Driven by improving trends across portfolio, Match Group expects third-quarter 2021 revenues between $790 million and $805 million, indicating year-over-year growth of 23-26%.

This media and internet company is expected to post quarterly earnings of $0.60 per share in its upcoming report, which represents a year-over-year change of +9.1%. Revenues are expected to be $801.22 million, up 25.2% from the year-ago quarter.

While earnings and revenue growth expectations are important in evaluating the potential strength in a stock, empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

For Match Group, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on MTCH going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank 3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

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