Match Group trending higher behind strong fundamentals

Online dating site operator Match Group (Nasdaq: MTCH) has been on an incredible run over the last four years. Match Group is the parent company of websites such as Tinder.com, Match.com, and OKCupid.com.

As late as April 2016, the stock was trading under $10 a share before rallying as high as $95 last month. The rally accelerated in the last 10 months and jumped from a low of $31.69 last November to the recent high of $95.32.

We will get to the chart in a minute, but one of the reasons the stock has been able to pull off such an impressive rally is the fundamental performance of the company. Match Group has been able to grow its earnings by 39% per year over the last three years and sales have grown by 23% during that same time period. Analysts expect earnings to grow by 18% for 2019 while sales are expected to grow by 19.4%.

In addition to the outstanding earnings and sales growth, the company’s management efficiency measurements are really good with a return on equity of 138.8% and a profit margin of 31.1%.

Adding these indicators together we see that the Tickeron SMR rating for this company is 4, indicating very strong sales and a profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents.

The Tickeron PE Growth Rating for this company is 17, and that indicates outstanding earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents. A rating of 1 indicates highest PE growth while a rating of 100 indicates lowest PE growth.

Turning our attention to the daily chart we see that the stock has been moving higher within a trend channel over the last 1o months. The upper rail connects the highs from February, May, and August while the lower rail connects the lows from November, August, and the current level.

The daily stochastic readings reached their lowest level of the past year before turning higher and making a bullish crossover on September 12. The 10-day RSI reached oversold territory for only the second time in the last year.

The Tickeron Technical Analysis overview shows several bullish indications. First, the Tickeron Price Growth Rating for this company is 3, and that indicates outstanding price growth. Match Group’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents. A rating of 1 points to highest price growth (largest percent return) while a rating of 100 points to lowest price growth (smallest percent return).

The lower Bollinger Band was broken on September 9 and suggests a price increase is expected as the ticker heads toward the middle band. In 14 of 20 cases where Match Group's price broke its lower Bollinger Band, its price rose further in the following month. The odds of a continued Uptrend are 70%.

Despite the fundamental performance and the incredible price gains, the sentiment toward Match Group is decidedly bearish. There are 19 analysts following the stock at this time. There are six “buy” ratings, 12 “hold” ratings, and one “sell” rating. This puts the buy percentage at 31.6% and that is well below average.

The short interest ratio is an incredible 15.95 with over 27 million shares sold short at this time. The ratio itself has bounced around quite a bit, but that has been due to changes in the average daily trading volume more so than the number of shares sold short. The short interest has been growing pretty consistently in the last few months and the current short interest level is the highest of the past year.