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Bull of the Day: Bumble (BMBL)

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Bumble Inc. (BMBL - Free Report) is expected to see double digit revenue growth this year and next as people are still turning to the dating apps. This Zacks Rank #1 (Strong Buy) had a big earnings beat in Q3 2022.

Bumble is the parent company of Bumble, Badoo, and Fruitz. Bumble was founded in 2014 and is one of the first dating apps built with women at the center. It connects users through Bumble Date, Bumble BFF, for those looking for friendship, as well as Bumble Bizz, the professional networking segment.

Badoo was founded in 2006 and is one of the pioneers of web and mobile dating products. Fruitz was founded in 2017 and uses fruit metaphors to encourage open and honest communications during dating.

A Big Beat in the Third Quarter

On Nov 9, 2022, Bumble reported its third quarter results and beat the Zacks Consensus by $0.14. Earnings were $0.14 versus the Zacks Consensus of $0.00.

It was the third meet or beat in a row.

Revenue rose 16.8% to $232.6 million up from $199.1 million a year ago driven by a 27.9% gain in Bumble App Revenue.

Badoo App and Other Revenue was not as bullish, as it declined 10.2% to $52 million.

Total paying users rose to 3.3 million from 2.9 million with total average revenue per paying User "ARPPU" rose to $22.96 from $22.81.

Fourth Quarter Guidance

Bumble gave fourth quarter guidance on revenue of a range of $232 million to $237 million. It does expect to see a $5 million impact to Badoo App and Other Revenue due to the Ukraine War.

Analysts Get Bullish about 2023

Bumble won't report earnings again until March 2023. Meanwhile, analysts are getting bullish with 1 estimate raised for 2022 and 2023 within the last week.

The 2022 Zacks Consensus Estimate has risen to $0.23 from $0.11 in the last 90 days. That's moving in the right direction but it's still down 86.6% from 2022, where the company earned $1.72.

Online dating apps, and all apps, in general, saw surging use during the pandemic which has started to wind down as the economy slows and consumers tighten spending.

But one estimate is also higher in the last week for 2023. The Zacks Consensus is looking for $0.19 in 2023, which is still down 18% from 2022, but it appears that the analysts were a little too pessimistic.

Shares Rally in the Last Month

Bumble shares fell 18.9% in the last year, and are well off their 2021 IPO highs.

Zacks Investment Research
Image Source: Zacks Investment Research

Yet the shares have staged a nice rally in the last month, adding 15.7%.

You aren't getting the shares on sale on a P/E basis, however, as they trade with a forward P/E of 126.4.

The Street might have been too pessimistic about Bumble in 2022. If you're looking for an online dating app company where the analysts are raising earnings estimates, then Bumble might be one for the short list.


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