Match Group is a provider of online dating products. The firm became public in 2015 and was more than 80% owned by IAC/InterActiveCorp until IAC spun it off in second-quarter 2020. The company has a vast portfolio of different online dating service providers, including Tinder, Match.com, OkCupid, PlentyOfFish, and Meetic. Match Group has more than 45 brands of online dating sites and/or apps, from which it generates user fee revenue (95%) and advertising revenue (5%).
Description from www.nordnet.se
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Statistics
The numbers analysis below is the first step in Rule 1 Investing by Phil Town. In his book Rule #1: The Simple Strategy for Successful Investing in Only 15 Minutes a Week! (no affiliate) he writes about his investing philosophy which centers around four key principles he refers to as the Four M’s: Meaning, Moat, Management and Margin of Safety.
The first requirement is an average annual growth rate of at least 10%, the past 10 years, in the ROIC (Return On Invested Capital), Sales, EPS (Earnings Per Share), Equity and Cash Flow. The average 5 year and 1 year growth rates should also be above 10%. High growth rates suggest a sustainable MOAT.
Next step is to analyse the the Four M’s: Meaning, Moat, Management and Margin of Safety.
The aim is to find a fantastic company, with a great track record, to invest in for at least 10 year. The expected average yearly return is at least 15%. This is used in the calculations. With an investment of 100 USD and a yearly return of 15%, 100 USD will have increased to 405 USD in 10 years time because of interest-on-interest or compound interest.
| Year | 2010 | 2011 | 2012 | 2013 | 2014 |
| ROIC | |||||
| Sales (MUSD) | 1637 | 2059 | 2801 | 3023 | 3110 |
| EPS (USD) | 0.93 | 1.85 | 1.71 | 3.29 | 4.68 |
| Equity (MUSD) | 2050 | 1960 | 1708 | 1729 | 1993 |
| Operational cash flow (MUSD) | 340707 | 372386 | 354527 | 410961 | 424048 |
| P/E |
| Year | 2015 | 2016 | 2017 | 2018 | 2019 |
| ROIC | 4.4% | 1.3% | 26.0% | 12.3% | 12.5% |
| Sales (MUSD) | 3231 | 3140 | 3307 | 4263 | 4757 |
| EPS (USD) | 1.33 | -0.52 | 3.18 | 6.59 | 4.5 |
| Equity (MUSD) | 2216 | 2011 | 2947 | 3552 | 3898 |
| Operational cash flow (MUSD) | 405671 | 344238 | 416699 | 988128 | 937939 |
| P/E | 29.94 | 0 | 25.94 | 18.65 | 42.12 |
ROIC and P/E rates are from gurufocus.com. The rest are from macrotrends.com.
Growth Rates
| Yearly average | 10 year | 5 year | 1 year |
| ROIC | 11% | 13% | |
| Sales Growth Rate | 13% | 10% | 12% |
| EPS Growth Rate | 19% | 36% | -32% |
| Equity Growth Rate | 7% | 15% | 10% |
| Cash Flow Growth Rate | 12% | 23% | -5% |
Price calculations
| Growth rates x 2 | Average P/E | Median P/E | Average between the high and low P/E | |
| P/E | 36.00 | 23.33 | 25.94 | 30 |
| Calculated future price in 10 years* | 319 | 207 | 230 | 266 |
| Calculated Price | 80 | 52 | 57 | 66 |
| Margin of Safety (50%) | 40 | 26 | 28.5 | 33 |
Calculated EPS = Current EPS ( 10 year average historic Equity growth rates ^10 )
Current price: 113 USD
To be considered for further analysis here, as a growth stock, the requirement is that the 10 year yearly average growth rate is at least 5% in all five categories. They are. I will put in price alerts and perhaps dig deeper when the price goes down to fair value.
Fair value range: 52 – 80 USD
Margin of Safety: 26 – 40 USD