Dating App Bumble In Focus After Analyst Downgrades Stock Citing Near-Term Challenges: Retail Stays Cautious

Shares of Austin, Texas-based Bumble, Inc. ($BMBL), an online dating and social networking platform, could come under pressure on Friday after the company received a rating downgrade.

Late Thursday, Wolfe Research downgraded Bumble to ‘Peer Perform’ from ‘Outperform,’ TheFly reported. The firm said it expects execution following a product reset, the recent CFO departure, rising competition and slowing industry growth.

In early December, Bumble said CFO Anu Subramanian and Chief Marketing Officer Selby Drummond plan to leave the company effective March 14, 2025, and Jan. 2025, respectively. The company named Neil Shah, a former Slack executive, to the newly created role of chief business officer.

Third-quarter results released in early November showed a bottom-line miss, but sales exceeded expectations. Revenue climbed 0.7% year-over-year (YoY) to $273.6 million, with namesake app revenue rising 0.7% to $220.2 million. On the other hand, Badoo App and other revenue fell by 0.6%.

Paying customers rose to 4.3 million from 3.8 million, but the average revenue per user fell to $21.17 from $23.42. 

Analysts at Wolfe said the company will likely issue conservative guidance for 2025. They view the stock as more of a trading asset rather than an investment asset over the near to medium term.

BMBL sentiment and message volume January 3, 2025, as of 2:42 am ET | Source: Stocktwits

On Stocktwits, retail sentiment toward Bumble stock worsened to ‘neutral’ (46/100), from ‘extremely bullish’ a week ago, with message volume tapering to ‘normal’ levels. 

A Bumble stock watcher on Stocktwits flagged it as one on which they are bullish. 

Another warned about the potential downside if the company does not still make money by February.

A third user expressed concerns about fundamentals.

Bumble stock plunged about 45% in 2024, and on Thursday, the first trading session of the year, the stock fell 2.09% to $7.97.

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