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Bumble share price: What’s the outlook following blockbuster IPO?

We look at the company’s recent operational performance as well as why one investment professional thinks the stock is a good option for ‘growth oriented’ investors.

Bumble’s blockbuster IPO

The dating world can be daunting. Bumble has aimed to change that, and maybe demand for its stock following its IPO suggests that it has. After pricing its initial public offering at $43 a share, the stock surged on debut last Thursday, closing out the session above $70.

The stock continued to rise last Friday, gaining a further $5.15 or 7.32%, to finish out the session at $75.46 per share.

With a focus on empowering ‘women to make the first move’, the dating application company has notched up significant growth in the last few years, reporting impressive top and bottom-line growth figures.

Looking first at Bumble’s ecosystem of users, at the time of the publishing their prospectus, Bumble said it had 42 million monthly active users (MAUs) spanning 150 different countries and had seen approximately 1.7 billion 'first moves' made on its platform. Maybe most interestingly, by the close of the September 2020 quarter Bumble had a staggering 2.4 million paying users – highlighting the lengths that individuals will go to enrich their social and romantic lives.

Here’s how those strong user engagement statistics have impacted Bumble’s top and bottom-line performance in recent times.

For the nine months ending September 30, 2020, the company reported:

  • Total revenues of $376.6 million, made up of Bumble App revenues of $231.5 million
  • Adjusted earnings (EBITDA) of $98.9 million, against a net loss of $84.1 million

Those results build on the positive trends Bumble saw by the close of FY19, where the company reported:

  • Total revenues of $488.9 million, up 35.8% on a year-over-year basis
  • Bumble App Revenue of $275.5 million, up 69.7% on a year-over-year basis
  • Adjusted earnings (EBITDA) of $101.8 million, up 54.7% on a year-over-year basis
  • Free Cash Flow came in at $91.7 million in 2019

Bumble share price: Where next?

According to finance personality Jim Cramer, Bumble is a solid option for an investor with a growth mindset. Comparing it to Match Group, parent company of popular dating app Tinder, Cramer said:

‘If you’re a growth-oriented investor, Bumble’s the way to go,’ while adding that ‘If you’ve got a more cautious approach to the market and you still want an online dating stock, Match is the way to go,' - via CNBC.

Commenting on its own future, in the prospectus it was noted that:

‘We are just getting started. We see significant upside in our core online dating market driven by the steady growth of the global singles population, increasing adoption of online dating both in the United States and globally and increasing propensity to pay for online dating.’

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.

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