Female-oriented dating App Bumble caused a stir when it went public back in February. After falling below its initial public offering price of $43 per share in May, bumble stock has now recovered to trade above the fifty-dollar mark.
After trading started on Feb. 11. Bumble stock steadily declined to a low of $38.91.
The IPO raised an impressive $2.1 billion – with the majority of the cash spent on an organizational restructure and the paying down of debt.
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About Bumble
Bumble is a dating site built primarily for women looking for casual relationships, although business relationships can be fostered too.
In heterosexual matches only women can initiate the first contact. In same-sex matched either person can reach out first.
The company operates two platforms – Bumble & Badoo – and has enjoyed strong growth since its inception
Whitney Wolfe Herd, the co-founder of Tinder, founded Bumble after leaving Tinder in 2014.
Revenue Sources
Bumble operates a freemium service with some customers purchasing premium subscriptions. These account for the lion-share of the App-based revenues.
Similar to Twitter and Facebook – users can boost the reach of their profiles in order to get more interactions on the platform.
The company currently has in excess of 2.5 million paying customers.
Bumble Stock Decline
Bumble stock initially declined after its IPO and then nosedived following the release of its first financial quarterly results.
Despite beating initial estimates analysts were not impressed and lowered their target prices. The stock was down some 11% on the close.
First-quarter revenues were $171 million with an annual growth rate of 43%. The global COVID-19 pandemic did not seem to affect Bumble App revenues – which saw an increase of over 61%.
The stock hit a low of $39.56 on May 24 2021.
Growth and Recovery
Since May Bumble stock has gradually recovered and currently trades over $50 a share.
The uptick has been seen by many as the result of strong headway made during an otherwise grim period during the pandemic.
Analyst expectations now sit closer to the $70 mark.
The company has been able to carve out a strong niche in the ultra-competitive world of online dating.
The women make the first move mantra is extremely popular with users – combined with significant consumer interest in the other offering – Badoo – expectations continue to be strong.
Many newer features – such as Bumble BFF (best female friend) and Bumble Bizz (for business) – are yet to be monetized. They have also seemingly been priced into the stock.
What Next for Bumble stock?
Bumble is expected to keep building out its ecosystem and increasing monetization opportunities and revenue potential. With particular emphasis on the monitization of new featuers.
The sell-off of tech-related stocks over the last few months has now slowed down to a trickle. Growth stocks, such as Bumble, have also been hammered. But the medium to long-term outlook seems more optimistic.
Current analyst price targets sit above the $70 mark.
This article in no-way should be construed as financial advice.