Should you buy Match Group stock? (November 2023)

I've started something new: https://www.3minutebreakdowns.com Match Group stock analysis. Ticker: MTCH Match Group owns dating apps Tinder and Hinge. Last week, the company reported earrings but investors were not impressed. Shares plunged 15% and are now 83% below their all-time high. After the drop, Match now has a current market cap of 8.7 billion dollars. The company has made 500 million of net income over the last 12 months and almost 800 million of free cash flow which means the stock is valued at 17 times earnings and 11 times free cash flow. That looks far too cheap for a business that is still growing. In the third quarter, revenue increased 9% year-over-year and earnings per share jumped 30%. So why did the stock drop? The main concern comes from the company’s biggest asset Tinder which makes up 60% of total revenue. While Tinder revenue increased 9% in Q3, that increase came entirely from higher prices. The number of paying users on the app actually declined by 6%. That’s a problem for a couple of reasons. First, Match can’t keep raising prices forever. When it stops raising prices, revenue growth will stall. Second, the nature of network effects means that fewer users on the platform means fewer matches and a worse experience all round. #mtchstock #investing #stockstowatch #stocks