were rising Thursday after analysts at Goldman Sachs upgraded the stocks to Buy, saying they see an “ample” runway for growth as the online dating landscape remains underpenetrated.
In a broader note on the industry, the Goldman Sachs team, led by analyst Alexandra Steiger, upgraded the rating on both stocks to Buy from Neutral. But the bank trimmed its price target on Match (ticker:
), a dating app on which women make the first move, had its price target cut to $54 from $57.
“Match Group & Bumble have underperformed the
in ‘21 and we see the current valuation as an attractive entry point into a multi-year compounded growth story,” Steiger wrote.
Shares in Match, which have fallen 16.75% over the past 12 months, rose 2.76% on Thursday. Bumble (ticker: BMBL) stock was up more than 5%.
Steiger highlighted a number of structural tailwinds for the industry’s growth in the years ahead: The erosion of social stigma, increased access to the internet and mobile devices, growth in the number of singles, and increased adoption of freemium models and subscriptions which she thinks will translate into more payer and revenue per payer growth.
“Additionally, as the lines between social/friend discovery and dating continue to blur, we see a path for further TAM [total addressable market] expansion and Match Group & Bumble to realize incremental monetization opportunities through product optimization & innovation,” Steiger noted.
As for Match, specifically, Goldman said the investment case is built around its ability to keep up revenue growth in coming years, via payer and revenue per growth. The bank expects sales at a 17% compound annual growth rate over the next five years, driven by domestic and international payer growth and continued RPP [revenue per payer] expansion.
Write to email@example.com
Credit: www.barrons.com – Source link