MTCH
MTCH is the industry leader in what is becoming an increasingly tighter oligopoly with a series of demographic tailwinds that should progressively expand its TAM, which it has barely penetrated. The presence of FB is a risk, but our only real concern there is whether it plans to charge for its dating service, which we don't believe will be the case. If we're wrong there, we'll just exit. However, we expect FB to remain an overhang on the stock until MTCH shows that it can maintain its current pace of sub adds after FB's dating service goes live (date TBD, still in development), so we're not banking on a sudden rebound to the high $40s until then. In the interim, we believe MTCH has a favorable near-term fundamental setup given what we estimate to be relatively conservative 2018 guidance/estimates, even before considering any product enhancements that the company plans to launch later this year.
We plan to host a call next Thursday at 2pm ET to discuss the supporting detail/analysis behind our long thesis. In the interim, let us know if you have any questions or would like to discuss in more detail.
Hesham Shaaban, CFA
Managing Director
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@HedgeyeInternet