Match Group Inc (NASDAQ:MTCH) has an easy-to-see bull case, qualitatively. Online dating has become an important component of the romantic experience, both in the U.S. and abroad. The company’s Tinder app adds another tailwind for Match Group stock. Margins are high; Adjusted EBITDA margins were 36% in 2017. The combination of solid growth and strong margins usually creates a sought-after stock.

The primary concern appears to be valuation, however. After gaining more than 8% following earnings on Tuesday afternoon, MTCH stock trades at 55x 2017 adjusted EPS. A mature, established online business like Intuit Inc. (NASDAQ:INTU) trades for half that multiple. Monetization of Tinder is helping growth now — but that tailwind should moderate going forward. The rest of the business, including sites Match.com and OKCupid, looks stable at best.

But looking closer, valuation isn’t as prohibitive as headline EPS numbers suggest. And Match Group has growth opportunities both in and beyond the Tinder platform. Match Group stock has soared, more than doubling since its spinoff from IAC/InterActiveCorp (NASDAQ:IAC) and gaining 105% over the past year.

And the rally in MTCH isn’t necessarily over yet.

Q4 Earnings

Match Group stock actually fell initially in after-hours trading, largely due to an earnings miss. Backing out one-time tax charges related to U.S. tax reform, EPS of $0.29 was $0.03 below consensus.

But investor attention has turned to subscribers — and revenue.

Revenue of $379 million rose 28.5% year-over-year, nearly six points better than the average Street estimate.

Subscriber growth was impressive — notably for Tinder. The app added 544,000 subscribers in the quarter alone, clearing the 3 million mark. According to figures from the company’s Q4 presentation, Tinder’s subscriber base rose a whopping 90% year-over-year. It’s climbed to 3.1 million from zero just four years ago.

2018 guidance looks strong as well, and has likely driven the optimism in early trading. Revenue rose 19% for full-year 2017; it’s guided up another 13-20% in 2018. Adjusted EBITDA is projected to increase 17-27%, which implies both further margin expansion and, most likely, an acceleration from 2017’s 16% increase.

Fundamentally, it’s an impressive quarter, and an even more impressive outlook. And it’s little surprise that MTCH stock has tacked on more gains to a run that’s now seen the stock nearly double in six months.

The Concerns For Match Group Stock

As good as 2018 numbers look, the mid- to long-term concerns still hold. Match Group’s impressive job of monetizing Tinder is driving growth — for now. But the company’s other products look mature at best. The subscriber base outside of Tinder appears to have declined 3% during 2017. In Q4, advertising revenue for Match.com, PlentyOfFish, and OkCupid declined year-over-year.

At best, that seems to leave Match Group stock dangerously reliant on Tinder. At worst, accelerated weakness elsewhere could partially offset the continued benefit of Tinder’s growth.

But Match Group is working on those platforms as well and cited subscriber stability in OkCupid in the quarter. International markets offer a growth opportunity across the board: the overseas subscriber base rose 36% in the quarter, against 15% growth in North America. Average-revenue-per-user climbed 11% as well.

Meanwhile, Q4 suggests that Tinder’s growth isn’t ending any time soon. The company will focus more on female users in 2018 — another way to expand its base. There, too, overseas growth offers an opportunity. At some point, Tinder will mature, like the rest of the portfolio. But there are a lot of singles left to add to the current 3 million-plus base before that happens.

Match Group Stock Isn’t As Expensive As It Looks

Meanwhile, MTCH is cheaper than trailing EPS multiples would suggest.

Thanks in part to tax reform, EPS should soar in 2018. Consensus estimates suggest a 32x forward multiple — and those estimates likely will be raised in the days to come. Relative to projected 2019 EPS, MTCH stock trades at a mid-20s multiple. Peer comparisons aren’t perfect, but other Internet plays like INTU, Care.com Inc (NYSE:CRCM), and even Facebook Inc (NASDAQ:FB) are in the same range.

From a cash flow perspective, meanwhile, the multiples look even more attractive. Guidance in the Q4 presentation suggests Match Group stock trades at about 25x 2018 free cash flow, a figure that should drop toward 20x in 2019. Forward EV/EBITDA is in the 20x range — pricy, to be sure, but not nearly as expensive as the 55x trailing P/E suggests.

Match Group stock isn’t cheap by any means. But it’s also offering substantial EPS growth in the near-term, and it’s cheaper than it might look at first glance. There’s room for both the multiple to expand and for growth to continue — and that’s an enticing combination at 25x cash flow and ~30x EPS.

I wouldn’t expect MTCH to double again over the next six months, but there should more room to run in the rally. Tinder alone should drive growth for years — and that alone should be enough to send MTCH stock higher.

As of this writing, Vince Martin has no positions in any securities mentioned.