Bumble Stock: Buy, Sell, or Hold?

Bumble expects its revenue to rise 21%-23% year over year in the first quarter of 2022, and to grow 22%-23% for the full year. That was roughly in line with analysts’ expectations for 23% growth in the first quarter and 22% growth for the full year.

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Bumble Stock: Buy, Sell, or Hold?

By comparison, Tinder added 1.7 million paying users during the third quarter; its 10.4 million total at the end of the period increased by 19% year over year. Match Groups total paying subscribers increased by 16% to 16.3 million. In other words, Match Group grew its userbase faster than Bumble during the third quarter, despite the former already having far more customers than the latter.

Meanwhile, the company reported a net loss of $10.7 million during Q3, compared to the net loss of $22.8 million reported during the prior-year quarter. The fact that Bumble is currently not consistently profitable may not be a significant issue yet. But unless Bumble can continue gaining paying users at a rapid clip and compete with Match, it may become difficult for the company to turn the net losses into net earnings.

The Bumble app first launched in 2014, and since then, it has amassed 1.5 million paying users as of the end of the third quarter. Clearly, the app has been at least somewhat successful. Badoo, which first launched in 2006, is popular in Europe and South America and had 1.3 million users as of Sept. 30.

People interested in online dating are likely to turn to those platforms with the most potential suitors. As the number of people on an app increases, it becomes even more appealing. Bumble could undoubtedly benefit from this dynamic as well, but with 10.4 million paying users as of the end of the third quarter, Tinder alone dwarfs both Bumble and Badoo combined in this category.

With dozens of companies battling it out for supremacy, the online dating area is highly competitive. Bumbles namesake app, from which it records the bulk of its revenue, seeks to attract customers in a unique way. By putting women in control — in heterosexual pairing, men cannot initiate conversations on the platform, only women can. Through this Bumble seeks to empower women while ensuring their safety when navigating the online dating world.

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