In This Article:
Today we're going to take a look at the well-established Match Group, Inc. (NASDAQ:MTCH). The company's stock saw a double-digit share price rise of over 10% in the past couple of months on the NASDAQGS. With many analysts covering the large-cap stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. But what if there is still an opportunity to buy? Let’s take a look at Match Group’s outlook and value based on the most recent financial data to see if the opportunity still exists.
See our latest analysis for Match Group
What's the opportunity in Match Group?
Match Group is currently expensive based on my price multiple model, where I look at the company's price-to-earnings ratio in comparison to the industry average. In this instance, I’ve used the price-to-earnings (PE) ratio given that there is not enough information to reliably forecast the stock’s cash flows. I find that Match Group’s ratio of 76.44x is above its peer average of 42.25x, which suggests the stock is trading at a higher price compared to the Interactive Media and Services industry. If you like the stock, you may want to keep an eye out for a potential price decline in the future. Given that Match Group’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us another chance to buy in the future. This is based on its high beta, which is a good indicator for share price volatility.
Can we expect growth from Match Group?
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. With profit expected to more than double over the next couple of years, the future seems bright for Match Group. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.
What this means for you:
Are you a shareholder? It seems like the market has well and truly priced in MTCH’s positive outlook, with shares trading above industry price multiples. However, this brings up another question – is now the right time to sell? If you believe MTCH should trade below its current price, selling high and buying it back up again when its price falls towards the industry PE ratio can be profitable. But before you make this decision, take a look at whether its fundamentals have changed.