Match Group, Inc.MTCHNASDAQ

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DCF Valuation

DCF Valuation Summary

Strong Buy

Fair Value: $116.53 per share(market-calibrated)

+278.3%

Upside to Fair Value

Current

$30.80

Pure Model

$125.78

Fair Value

$116.53

Bull Case

$162.14

Bear Case

$96.41

Market Reality Check

Model Terminal Growth

3.75%

Market-Implied Growth

0.50%

Calibrated Growth

2.61%

Fair value uses 65% model / 35% market-implied terminal growth. Pure model: $125.78.

What's Driving This Ratingfor MTCH

✓

CapEx already efficient

CapEx at 1.74% of revenue is already at or below sector maintenance level. No normalization needed — cash conversion is already strong.

✓

Premium margins already priced in

EBIT margin of 39.74% is already well above sector average. The model holds this level — there's limited room for margin expansion to drive upside. Valuation depends primarily on revenue growth.

→

Moderate revenue growth

Analyst consensus projects 0.07% revenue growth, fading to 3.75% by Year 10. Revenue reaches $5.2B (vs $3.5B today).

🎯

Market pricing in lower growth than model

The market implies only 0.50% perpetual growth — 325bps below the model's 3.75%. This suggests the market sees headwinds or risks not in the model.

✓

Strong cash flow conversion

Year 10 FCF/EBITDA conversion of 78.02% indicates efficient cash generation. FCF reaches $1.7B by Year 10 (32.52% FCF margin).

Weighted Average Cost of Capital (WACC)

Cost of Equity (CAPM)

Risk-Free Rate (Rf)4.50%

Beta (β)1.31

Market Risk Premium4.50%

*Using current implied premium (4.5% per Damodaran 2026), not historical (6.5%)

Cost of Equity (Re)10.42%

Cost of Debt

Pre-tax Cost of Debt3.74%

Tax Rate17.77%

After-tax Cost of Debt3.08%

Equity Weight (E/V)65.30%

Debt Weight (D/V)34.70%

WACC Calculation

WACC = (E/V × Re) + (D/V × Rd × (1-Tc))

WACC = (65.30% × 10.42%) + (34.70% × 3.08%)

= 7.87%

10-Year Free Cash Flow Projections(showing years 1, 3, 5, 7, 10)

Year	Year 1	Year 3	Year 5	Year 7	Year 10
Revenue	$3.5B	$3.8B	$4.3B	$4.6B	$5.2B
EBIT	$1.4B	$1.5B	$1.7B	$1.8B	$2.1B
Tax	$246M	$270M	$301M	$327M	$367M
NOPAT	$1.1B	$1.3B	$1.4B	$1.5B	$1.7B
+ Depreciation	$68M	$75M	$83M	$90M	$101M
- Capex	$61M	$67M	$74M	$81M	$91M
- Δ NWC	$242,591.9	$20M	$19M	$19M	$19M
Free Cash Flow	$1.1B	$1.2B	$1.4B	$1.5B	$1.7B
Discount Factor	0.927	0.797	0.685	0.588	0.469
Present Value	$1.1B	$987M	$947M	$886M	$793M

FCF Formula: Free Cash Flow = NOPAT + Depreciation - Capex - Change in Net Working Capital

Terminal Value Calculation

Perpetuity Growth Method

Year 10 FCF$1.7B

Terminal Growth Rate3.75%

WACC7.87%

TV = FCF₁₀ × (1+g) / (WACC-g)

Terminal Value$42.6B

PV of Terminal Value$20.0B

Exit Multiple Method

Year 10 EBITDA$2.2B

Exit Multiple (EV/EBITDA)28.0x

TV = EBITDA₁₀ × Exit Multiple

Terminal Value$60.7B

PV of Terminal Value$28.5B

Valuation Summary

Perpetuity Growth Method

PV of Projected FCFs$9.3B

PV of Terminal Value$20.0B

Enterprise Value$29.2B

(-) Net Debt$2.9B

Equity Value$26.3B

Shares Outstanding243M

Price per Share$108.28

Exit Multiple Method

PV of Projected FCFs$9.3B

PV of Terminal Value$28.5B

Enterprise Value$37.7B

(-) Net Debt$2.9B

Equity Value$34.8B

Shares Outstanding243M

Price per Share$143.28

Pure Model Fair Value

$125.78

Average of perpetuity growth and exit multiple methods (before market calibration)

Sensitivity AnalysisPrice per Share

WACC ↓ / Growth →	2.75%	3.25%	3.75%	4.25%	4.75%
5.87%	$165.57	$178.33	$197.10	$196.49	$188.25
6.87%	$137.01	$143.43	$151.91	$163.63	$180.88
7.87%	$117.43	$121.15	$125.78	$131.69	$139.49
8.87%	$102.70	$105.05	$107.87	$111.30	$115.56
9.87%	$90.97	$92.55	$94.39	$96.57	$99.16

How to read: This table shows how the valuation changes with different WACC (discount rate) and terminal growth rate assumptions. Green = undervalued, Red = overvalued.

Scenario Analysis

Bear Case

$96.41

213.0% vs current

• -25% vs analyst consensus
• Terminal growth: 3.3%
• Beta: 1.64

Base Case

$125.78

308.4% vs current

• Analyst consensus
• Terminal growth: 3.8%
• Beta: 1.31

Bull Case

$162.14

426.4% vs current

• +25% vs analyst consensus
• Terminal growth: 4.3%
• Beta: 1.12

Key Assumptions & Drivers✓ Using Analyst Consensus Estimates• Technology Sector

Growth Assumptions (Select Years)

Year 1 Revenue Growth0.07%

Year 3 Revenue Growth5.57%

Year 5 Revenue Growth4.55%

Year 7 Revenue Growth4.23%

Year 10 Revenue Growth3.75%

Terminal Growth Rate3.75%

Margin & Efficiency

Current EBIT Margin39.74%

Tax Rate17.77%

Historical Capex / Rev1.74%

NWC / Revenue10.00%

Key Drivers: Revenue growth, operating margin expansion, capex efficiency, and working capital management are the primary drivers of cash flow generation. Terminal value assumptions significantly impact final valuation.

Institutional-Grade Methodology

Actual Company Data: Revenue, EBIT, Capex, NWC, Tax Rate, Interest Expense, Beta

Market Assumptions: Risk-free: 4.5% (10Y), MRP: 4.5% (Damodaran 2026), Exit: 28x EV/EBITDA (Technology sector)

This DCF model is for informational purposes only. Projections are based on assumptions that may not materialize. Past performance does not guarantee future results. Consult a financial advisor before making investment decisions.

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