MTCH - Valens Credit Report - 2022 07 22
Cash bond markets are materially overstating credit risk with a cash bond YTW of 6.496% relative to an Intrinsic YTW of 4.356%, while CDS markets are overstating credit risk with a CDS of 245bps relative to an Intrinsic CDS of 128bps. Furthermore, Moody's is materially overstating the firm's fundamental credit risk, with its Ba2 credit rating six notches lower than Valens' IG3 (A2) credit rating.Incentives Dictate Behavior™ analysis highlights mostly positive signals for credit holders. Specifically, MTCH's compensation metrics incentivizes management to focus on all three value drivers: asset efficiency, margins, and revenue growth, which should lead to Uniform ROA expansion and increased cash flows available to service obligations. Additionally, management members are material owners of MTCH equity relative to their average annual compensation, indicating they are well-aligned with shareholders for long-term value creation.
Earnings Call Forensics™ of the firm's Q1 2022 earnings call (5/3) highlights that management is confident customers are choosing to use their payment system instead of Google Play billing. Also, management is confident their hard paywall business has payer penetration of 40% and that they could be met with spending opportunities as other marketers' advertising budgets are cut.
In 2009, just as the dust was settling from the last major equity and credit market crises, we launched a boutique research firm with the intention of breaking Wall Street’s biases and broken incentives:
- GAAP and IFRS have failed to provide rules for reliable financial statement reporting
- Stock analyst recommendations are not grounded in disciplined financial analysis
- Credit agencies have been set up to grossly fail in their responsibilities to investors and the public markets
- Utter lack of willingness of major research firms to employ the the most advanced forensic analysis available
We sought to provide investors and company analysts with a source of information that changed all that.
Many years later, our business model remains because little has changed on Wall Street.
- Corporate credit ratings remain years behind the fundamental underpinnings of company performance
- Stock analysts continue to make recommendations with deeply inherent biases
- Research firms have failed to break down the walls between credit, equity, and macroeconomic research
- The governing accounting bodies have created more leeway for mis-estimates and mis-classifications as financials have become unwieldy and overwhelming
The integrity of Valens Research is founded in our disciplined processes and analytics. No “star” analysts. No corporate advisory relationships. No-nonsense opinions and recommendations.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.