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KEY POINTS OF DISCUSSION
- OWNS THE SPACE: MTCH is the industry leader in the dating space with a portfolio of over 40 brands; many of which were promising competitors that MTCH acquired before they could become material threats. Most of its business is concentrated around a few brands, particularly Tinder, which may have already achieved escape velocity in terms of its scale, and is also a gamechanger from a monetization perspective.
- DEMOGRAPHIC TAILWINDS: We expect the online dating pool to expand given both emerging and continuing tailwinds that should collectively increase the lifetime value of MTCH's user base. Further, Tinder’s pricing structure should create an incremental near-term ARPU tailwind in North America that should stack on top of the Tinder monetization tailwinds mentioned above.
- NEAR-TERM SETUP: We don't see FB as a material risk, but it could 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. In the interim, we believe 2018 guidance/estimates are relatively conservative, even before considering any product enhancements that the company plans to launch later this year.
Let us know if you have any questions or would like to discuss further.