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
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.
|Operational cash flow (MUSD)||340707||372386||354527||410961||424048|
|Operational cash flow (MUSD)||405671||344238||416699||988128||937939|
ROIC and P/E rates are from gurufocus.com. The rest are from macrotrends.com.
|Yearly average||10 year||5 year||1 year|
|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%|
|Growth rates x 2||Average P/E||Median P/E||Average between the high and low P/E|
|Calculated future price in 10 years*||319||207||230||266|
|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