Dating platforms Match (MTCH) - Get Match Group, Inc. Report and Bumble (BMBL) - Get Bumble Report should benefit from the court ruling last week that Apple (AAPL) - Get Apple Inc. (AAPL) Report can no longer prevent apps from offering direct payment options, Cowen says.
Match and Bumble "could see higher margins beginning in 2022-23,” wrote Cowen analyst John Blackledge. He has an outperform rating on both stocks.
Match spent about $500 million in app store payments in 2020, or just under 80% of cost of revenue, he said.
He estimates that 75% of these fees went to Apple. That shows the cost-savings opportunity if new payment methods emerge, he said.
“If we assume that 50% of MTCH's iOS customers will opt to pay via credit card on the MTCH website (with a 3% take for payment processing), MTCH could generate an additional $295 million in 2022 Ebitda, a 19% increase vs. our current estimate of $1.58 billion," he wrote.
As for Bumble, “if we assume a similar 80% of cost of revenue is attributable to app store fees (Apple and Android (GOOGL) - Get Alphabet Inc. Class A Report combined), this would equate to $196 million on our 2022 estimates,” Blackledge said.
“In a hypothetical scenario where 50% of users who are subject to a 30% app store fee decide to pay via a BMBL website (with a 3% take for payment processing), BMBL would see 2022 Ebitda rise by $88 million,” or 38% above Cowen’s estimate.
Match stock recently traded at $161.42, down 1.8%, and Bumble shares were at $55.75, down 4.2%.