The supply chain disruptions and high crude oil prices have widened inflation risks. The consumer price index rose 6.8% in November, and it could increase further. On the other hand, the Federal Reserve doubled the taper rate and expects three rate hikes next year.

The possible impact of rising omicron COVID-19 cases on the economic recovery could lead to further market volatility. However, JPMorgan analyst Doug Anmuth recently said e-commerce and subscription-based names are preferred, given easing comps, a reacceleration of growth, and an overall more favorable operating environment.

Anmuth’s favorite small and midcap internet picks are Match Group, Inc. (MTCH) and Bumble Inc. (BMBL).  He expects both stocks to rally in 2022 as the economy continues to recover.

Match Group, Inc. (MTCH)

Match Group, Inc. provides dating products worldwide. The company’s portfolio of brands includes Tinder, Match, Meetic, OkCupid, Hinge, Pairs, PlentyOfFish, OurTime, and various other brands.

On December 14, 2021, MTCH announced its business will be carbon neutral by March 2022 following the purchase of offsets that effectively make the company’s operations carbon neutral, beginning with the year 2021 lasting through the subsequent two years. With this purchase, which is based on projected greenhouse gas emissions, the company commits to offsetting its corporate footprint for each year in the future.

MTCH’s total revenue increased 25% year-over-year to $802 million for the fiscal third quarter ended September 30, 2021. The company’s adjusted EBITDA increased 1.5% year-over-year to $54.50 million, while its total assets came in at $4.89 billion, representing a 60.6% year-over-year decrease.

MTCH’s EPS is expected to increase 298% year-over-year to $1.95 in fiscal 2021. The company’s revenue is expected to increase 29.1% year-over-year to $839.79 million for the quarter ending March 31, 2022. Wall Street analysts expect the stock to hit $169.43 in the near term, which indicates a potential upside of 31%.

Bumble Inc. (BMBL)

BMBL provides online dating and social networking platforms internationally. It owns and operates websites and applications that offer subscription and credit-based dating products. The company operates two apps, Bumble and Badoo, with approximately 40 million users every month.

On November 11, 2021, Whitney Wolfe Herd, Founder and CEO of BMBL, said, “We believe we are well positioned for the fourth quarter, given our ongoing product and market leadership combined with the operating leverage in our cost structure. Based on these factors, we are raising our full year 2021 outlook for both revenue and adjusted EBITDA.”

BMBL’s total revenue increased 24% year-over-year to $201 million for the fiscal third quarter ended September 30, 2021. The company’s adjusted EBITDA increased 15% year-over-year to $285 million. Also, total liabilities came in at $1.29 billion, down 17.2% year-over-year.

Analysts expect MTCH’s EPS and revenue to increase 3,380% and 41.6% year-over-year to $1.64 and $767.90 million, respectively, in fiscal 2021. Wall Street analysts expect the stock to hit $75 in the near term, which indicates a potential upside of 64.2%.

MTCH shares were trading at $131.30 per share on Tuesday afternoon, up $5.46 (+4.34%). Year-to-date, MTCH has declined -13.16%, versus a 24.95% rise in the benchmark S&P 500 index during the same period.

About the Author: Nimesh Jaiswal

Nimesh Jaiswal's fervent interest in analyzing and interpreting financial data led him to a career as a financial analyst and journalist. The importance of financial statements in driving a stock’s price is the key approach that he follows while advising investors in his articles. More...

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