Online dating giant Match (NASDAQ:MTCH) has played the part of both Wall Street favorite and Wall Street dud over the past year. At the current moment, MTCH stock looks like a Wall Street favorite again.

But I’m not so sure this big run in MTCH stock will last much longer.

From a technical perspective, you have a stock that is up more than 60% in just over 2 months, technically overbought according to the Relative Strength Index and pushing up against levels which have historically signaled a top. That isn’t a great setup for Match Group stock to keep rallying in the near term. Meanwhile, on the fundamentals side, there are signs that Match’s dominance may slip over the next several quarters. If it does, the current valuation is not justified.

MTCH is set to report earnings today after the close. Analysts expect EPS of 38 cents per share on revenues of $448 million. MTCH is down about 5% heading into the report.

Overall, MTCH stock simply seems out of gas here and now. Near-term upside seems capped by fundamental and technical risks.

The Online Dating Market Will Be Huge

Online dating has broken out of its shell. A decade ago, this was a niche industry with a small user base. Today, social norms have shifted to not only accept online dating as appropriate, but also deem it as effective and worthwhile given that: 1) everyone is on it, 2) it takes minimal time and effort and 3) it’s a great way to meet people for many different purposes.

Growth across the online-dating segment won’t slow any time soon. Online dating fits alongside other secular trends such as increased digital connection, unprecedented connectivity and convenience, and the at-home economy. As such, the online dating trend will eventually touch all corners of the internet.

That means there is plenty of growth left. There are 4 billion internet users in the world. According to U.S. census data, roughly 45% of Americans age 18 and up are unmarried. That equates to about 60 million unmarried households, or 48% of total households. Of those 60 million households, 7 million were maintained by unmarried couples. Let’s say there are another 10 million or so household maintained by unmarried individuals in serious relationships.

As such, the number of truly single households in the U.S. is likely somewhere around 40 million. There are about 125 million households in the U.S. Thus, the single rate in the U.S. is presumably around 30%. Globally, the rate is likely lower due to cultural differences. Data is tough to find, but one big trend is that the urbanization of global society is pushing marriage rates down, and pulling the single rate up. Thus, in several years, it’s easy to see the global single rate being 25%.

Thus, at any given time, you are talking about 1 billion single internet users. Not all of those single people will use online dating apps. Roughly 15% of Americans have used an online dating service in the past. That share is rapidly growing. With time, it should grow to 25%. Globally, the rate will much lower. Thus, a 20% online dating penetration rate among singles seems achievable. That implies roughly 200 million potential online dating members at scale.

But, many of these services, like Tinder, are free. Only Tinder’s upgraded versions cost money. The fraction of those willing to pay up for the premium services remains small. But, it’s growing, and it will likely become far more common as those who don’t have paid will be left at a disadvantage. At scale, maybe 25% of online daters pay up for premium packages. That implies a global pool of 50 million paid subs. At an average price of $20 per month, that equates to a $12 billion annual revenue opportunity.

Match Is King, But For How Much Longer?

In that potential $12 billion online dating market, Match is king. Thanks to its suite of online dating properties — including Match.com, Tinder, PlentyOfFish and OkCupid — Match’s dominance across the e-dating ecosystem is unchallenged.

This dominance may continue. Match has the most resources and the most users, meaning the company’s platforms will presumably benefit from better interfaces and network effects.

But, there’s reason to believe that Match’s dominance is slipping. Specifically, newcomers to the space may be taking some of Match’s market share. For example, privately-owned Bumble appears to be successfully making strategic moves which could chip away at Match’s market share over the next several quarters and years.

Bumble is a women-first online dating app. The core feature of the dating platform is that women have to message men first, and the whole messaging behind Bumble is empowering women to “make the first move”. This messaging aligns itself with current sociopolitical trends. It also guards Bumble from the stereotype of women’s experiences when it comes to how men behave in online dating apps. And, the users don’t have to be single . Bumble has options platonic friend and business relationships, too.

This is a big deal. If anything is true in the online dating community, it is that men follow women. If all the women migrate to Bumble, all the men will follow suit. Indeed, this may already be happening. The company spent big on a Super Bowl commercial that featured tennis superstar Serena Williams, and that ad propelled search interest related to Bumble to all time highs. For the first time ever, Bumble’s search interest in the U.S. is on par with Tinder’s search interest.

Overall, I used to think that the online dating market had one runaway leader in Match. Now, I think that Bumble is gearing up to take some serious market share away from one of Match’s biggest properties, Tinder. That has negative long-term implications for MTCH stock.

Large Range of Potential Outcomes for Match Stock

On one end, Match could continue to dominate the online dating industry. If so, Match could end up with half of the world’s potential 50 million paid online dating subs, or 25 million subs. At $20 per month, that equates to $6 billion in revenue. That could reasonably flow into $2 billion in net profits. A growth-average 20 multiple on that implies a $40 billion valuation at scale.

On the other end, Match could rapidly lose market share to competitors like Bumble. If so, Match could end up with maybe just 30% of the world’s 50 million online dating subs, or 15 million subs. At $20 per month, that equates to about $3.6 billion in revenues. That could reasonably flow into $1.2 billion in net profits. A growth-average 20 forward multiple on that implies a $24 billion valuation at scale.

In either scenario, it will probably take over 5 years to hit scale. More likely, it will take somewhere around 7 years. Using a 10% discount rate, that means a bullish present value for MTCH stock is $20 billion, while a bearish present value for MTCH stock is $12 billion.

Assuming 50/50 odds of either materializing, a reasonable present market cap for MTCH stock today is $16 billion. Thus, risk-adjusted upside from here seems limited.

Bottom Line on MTCH Stock

From an operational perspective, Match is still in the early stages of a massive online-dating growth narrative that will turn into a multi-billion dollar revenue and profit opportunity for the company. That implies that big growth is here to stay for a lot longer.

But, at current levels, MTCH stock is already priced for a lot of that big growth. Plus, reinvigorated competition from Bumble threatens the robustness of Match’s long term growth trajectory. As such, with risks mounting on an already super-charged valuation, further upside in MTCH sock seems limited here.

As of this writing, Luke Lango did not hold a position in any of the aforementioned securities.