Although incomplete, the annual results published on March 6 confirm the good growth trajectory. Over the four years of available financial data, revenues have increased from $109 million to $195 million, due in particular to a marked acceleration in registrations since 2021.

The unchanged gross margin over the period, more or less comparable to that of Match Group, the online dating heavyweight, suggests that Grinder did not engage in overly aggressive marketing to artificially boost its growth before the IPO - a classic of the genre, and an eternal point of vigilance with online services companies.

The cash profit, or "free cash flow", increased from $36 to $46 million, and the sum of profits generated over the last four fiscal years - fiscal years 2019 to 2022 - reached $136 million. This is before the stock option plan, which in 2022 still represents half the profit. First potential "red flag".

We also note the distribution of $196 million in dividends over the past year, an amount greater than the sum of the profits made, financed by the $360 million in additional debt and the $110 million obtained via the capital increase.

Prosperity is precarious in the online dating sector, and the platforms are subject to powerful fashion effects: it is therefore reasonable to monetize the activity as much as possible, which is more profitable as soon as it reaches a certain scale.

Grinder's balance sheet, therefore, looks more like that of an LBO. All other things being equal, the long-term debt - the only source of capitalization of the company - is equivalent to seven years of cash profit. As such, the deal will only be of interest to shareholders willing to walk the razor's edge. Second potential "red flag".

Notwithstanding the competitive advantage of the so-called "network effect" - the more users on a platform, the more newcomers want to join - at $7 a share, Grinder's enterprise value is $1.5B, or x7.5 in revenues and x32 in profits before stock options.

Multiples that we will of course compare to those of Match, owner of Tinder, OkCupid and Plenty of Fish among others, with a turnover fifteen times higher and currently valued at x3 of revenues and x30 of cash profits before stock-options.

Match's growth history is not encouraging, as its sales have stagnated over the last decade despite nearly $2 billion invested in acquisitions. External growth operations which, as a result, are more akin to maintenance than to growth. Third "red flag".

Despite Grinder's ubiquity in its market segment, the assumption of continued sales expansion - clearly included in the valuation - should be taken with great caution.