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Bumble (BMBL - Free Report) is a Zacks Rank #5 (Strong Sell) that provides online dating and social networking platforms across North America, Europe, and internationally. As the parent company of Bumble and Badoo, two of the world’s highest-grossing dating apps, Bumble allows millions of users to connect and build relationships.
The stock plunged after a recent earnings report in which the company cut its outlook. Investors likely face a rough rest of the year until the
About the Company
Bumble was founded in 2006 and is headquartered in Austin, Texas. The company runs websites and applications offering subscription and in-app purchase dating products.
Bumble is valued at just under $1 billion and has a Forward PE of 7. The stock holds Zacks Style Scores of “B” in both Growth and Value, as well as an “A” in Momentum.
Q2 Earnings
On August 7th the company posted a 47% EPS beat. This was the fourth earnings beat out of the last five quarters. However, revenues missed and the company cut its guidance.
Q3 is now seen in a range of $269-75M v the $297M expected. Bumble cut its revenue 1-2% y/y from 8-11% and dropped y/y EBIDTA margin expectations to “at least” 200bps from 300 bps.
While total paying users were up to 4.1M from 3.6M last year, Total ARPPU was $21.37 v $23.23 last year.
Management had comments on the guidance cut saying:
“We are resetting our guidance today to reflect actions we are taking to position Bumble to reignite user growth, deliver improved customer value, and drive long-term revenue growth. We believe our strong balance sheet and cash flow generation give us the flexibility we need to return capital to shareholders while creating lasting value.”
Analysts Slash Estimates
Since the earnings report, analysts have started to cut their estimates and price targets.
For the current quarter, the last seven days have seen estimates reduced from $0.25 to $0.22, or 13%.
The next quarter gets worse, with numbers falling from $0.27 to $0.22, or 18%.
The current year stabilizes a bit, but next year’s numbers have dropped 15%, going from $1.17 to $0.99.
Many firms lowered their price targets along with estimates after earnings.
Citigroup went to $6 from $12, RBC went from $16 to $8, and Goldman went to $9 from $18.
Technical Take
The stock dropped over 40% on the news, which is crushing for those investors that stuck with the stock since the IPO.
For now, there is a dead money situation where the stock is stuck around the $4-6 area for the time being.
Until there is some constructive action in the chart, investors should stay away. For those interested in the long-term prospects, wait for the gap to fill and, price to get over the 21-day or 50-day MA before you even consider an entry.
In Summary
Given the current challenges faced by Bumble, it’s clear that the company is struggling to find its footing in a highly competitive market. Analyst sentiment has turned increasingly negative, with substantial cuts to earnings estimates and price targets from major firms, reflecting concerns about the company’s ability to regain its growth trajectory. The technical outlook further reinforces this cautious stance, as the stock remains depressed following a sharp decline.
For those interested in the space, a better option might be Grindr (GRND - Free Report) . The stock is a Zacks Rank #2 (Hold) that is coming off an earnings beat and is trading near 2024 highs.
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Bear of the Day: Bumble (BMBL)
Bumble (BMBL - Free Report) is a Zacks Rank #5 (Strong Sell) that provides online dating and social networking platforms across North America, Europe, and internationally. As the parent company of Bumble and Badoo, two of the world’s highest-grossing dating apps, Bumble allows millions of users to connect and build relationships.
The stock plunged after a recent earnings report in which the company cut its outlook. Investors likely face a rough rest of the year until the
About the Company
Bumble was founded in 2006 and is headquartered in Austin, Texas. The company runs websites and applications offering subscription and in-app purchase dating products.
Bumble is valued at just under $1 billion and has a Forward PE of 7. The stock holds Zacks Style Scores of “B” in both Growth and Value, as well as an “A” in Momentum.
Q2 Earnings
On August 7th the company posted a 47% EPS beat. This was the fourth earnings beat out of the last five quarters. However, revenues missed and the company cut its guidance.
Q3 is now seen in a range of $269-75M v the $297M expected. Bumble cut its revenue 1-2% y/y from 8-11% and dropped y/y EBIDTA margin expectations to “at least” 200bps from 300 bps.
While total paying users were up to 4.1M from 3.6M last year, Total ARPPU was $21.37 v $23.23 last year.
Management had comments on the guidance cut saying:
“We are resetting our guidance today to reflect actions we are taking to position Bumble to reignite user growth, deliver improved customer value, and drive long-term revenue growth. We believe our strong balance sheet and cash flow generation give us the flexibility we need to return capital to shareholders while creating lasting value.”
Analysts Slash Estimates
Since the earnings report, analysts have started to cut their estimates and price targets.
For the current quarter, the last seven days have seen estimates reduced from $0.25 to $0.22, or 13%.
The next quarter gets worse, with numbers falling from $0.27 to $0.22, or 18%.
The current year stabilizes a bit, but next year’s numbers have dropped 15%, going from $1.17 to $0.99.
Many firms lowered their price targets along with estimates after earnings.
Citigroup went to $6 from $12, RBC went from $16 to $8, and Goldman went to $9 from $18.
Technical Take
The stock dropped over 40% on the news, which is crushing for those investors that stuck with the stock since the IPO.
For now, there is a dead money situation where the stock is stuck around the $4-6 area for the time being.
Until there is some constructive action in the chart, investors should stay away. For those interested in the long-term prospects, wait for the gap to fill and, price to get over the 21-day or 50-day MA before you even consider an entry.
In Summary
Given the current challenges faced by Bumble, it’s clear that the company is struggling to find its footing in a highly competitive market. Analyst sentiment has turned increasingly negative, with substantial cuts to earnings estimates and price targets from major firms, reflecting concerns about the company’s ability to regain its growth trajectory. The technical outlook further reinforces this cautious stance, as the stock remains depressed following a sharp decline.
For those interested in the space, a better option might be Grindr (GRND - Free Report) . The stock is a Zacks Rank #2 (Hold) that is coming off an earnings beat and is trading near 2024 highs.