Match Group (NASDAQ:MTCH) has been in the news recently, but not in the best way possible. The U.S. Federal Trade Commission has sued MTCH for using “fake love interest ads” to lure customers into buying subscriptions. But listening to one side of the story — or simply reading the headlines — doesn’t give you much perspective.
Granted, this isn’t a shining moment for the company — that was proven when MTCH stock dropped almost 15% in the past month. But don’t let the headlines distract you.
Match Group isn’t denying that there has been some gaming of the system over the years (the suit spans from 2013-2018). But what is the true scale of its gaming? Plus, the company even mentioned this issue in its recent U.S. Securities and Exchange Commission Form 10-Q. It’s a good sign that MTCH is being upfront with investors.
The company runs the dating sites Match, Tinder, Hinge, PlentyOfFish, Meetic, OKCupid and Pairs. With a market cap around $20 billion, it’s no surprise the FTC wants to make sure it’s operating above board. If the FTC sets an example with the industry’s biggest player, the rest will fall in line.
And usually, after fiery opening statements on both sides, these things get hammered out by teams of lawyers and a reasonable settlement is reached. The only trouble that can appear in this stage is if MTCH decides to take its case to court.
That can be costly on a number of levels — and companies rarely end up winning in the bigger picture.
The Future of Match Group Stock
And right now, despite this recent spate of bad news, MTCH stock has been hot. It’s up 71% year-to-date and yet it’s trading at a trailing price-to-earnings ratio of 43. And over the past three years, the stock is up over 310%. Frankly, it still earns a “buy” rating from me.
The fact is, that underlying this current issue with the FTC, online dating is a mega-trend — a trend that will last years, regardless of most economic factors. With more digital-native generations that use online social media platforms, and more companies catering to these new consumers, online dating will continue to grow.
Also, the speed of technology is continuing to leapfrog ahead.
A decade ago, artificial intelligence was barely an idea. Now, we have computers in our homes — and in our hands — that we can talk to for the news and driving directions. We can even use them to order food. The potential here is vast; AI is creating one of the best investing opportunities I’ve seen in decades.
MTCH is starting to tap into the AI revolution, too, with its Match.com chatbot, “Lara.” And ultimately, the company remains on top of the online dating hill.
That doesn’t mean you can ignore what’s going on with the FTC — but this certainly doesn’t spell doom. And MTCH stock is certainly cheaper than it was a month ago.
Speaking of Artificial Intelligence …
As AI is applied to just about every major industry worldwide, the AI market is expected to grow from $21.5 billion in 2018 to $190.6 billion by 2025. So, today, I want to walk you through a few areas that are already being impacted by AI. Now is the time to invest in this world-changing technology.
Stocks like MTCH are tangential to this trend. When it comes to a game-changer like AI, they’re like holding the key to one room in a tall skyscraper. I’d much rather have the AI “Master Key.”
For that, you want to own one well-established, but little-known name in computer hardware.
Because it’s the leader in its market, its products are going to be crucial in the AI revolution. That will be the stock that lets us cash in over the years to come — as AI revolutionizes transportation, healthcare, retail (and much more).
In Growth Investor, we made 274% the last time we owned it. And now I’m back for round two.
Go here to watch my presentation on the huge technological shift going on now. At the end, you’ll get the chance to hear my #1 investment in artificial intelligence — for free.
Louis Navellier had an unconventional start, as a grad student who accidentally built a market-beating stock system — with returns rivaling even Warren Buffett. In his latest feat, Louis discovered the “Master Key” to profiting from the biggest tech revolution of this (or any) generation. Louis Navellier may hold some of the aforementioned securities in one or more of his newsletters.
