Bumble Shares Plunge 16% on Disappointing Revenue Outlook
Bumble Inc. (BMBL) shares witnessed a sharp 16% decline on Wednesday after the dating app company released its first-quarter revenue forecast below market expectations. The company attributed the setback to continued deceleration in paying user growth.
In the past year, the Austin-based company's stock has fallen by approximately 40%. Despite recent executive shakeups, including the return of CEO Whitney Wolfe Herd in March, Bumble continues to face challenges.
The company has implemented cost-cutting measures, redesigned its Bumble app, and expanded its signature "make the first move" feature to "opening moves," allowing women to initiate conversations with potential matches. However, industry analysts remain cautious about the company's turnaround efforts.
"More work is needed on the turnaround, and visibility is limited as management has not provided full-year guidance for the first time," said Citi analyst Ygal Arounian.
Bumble's market capitalization is set to decrease by over $142 million if premarket losses persist. As of the previous closing price, Bumble's valuation stands at $876.3 million, significantly lower than the $8.85 billion valuation of Match Group, the parent company of Tinder.
The company has announced the discontinuation of its Fruitz and Official dating apps by the first half of the year. "We have evaluated our resource allocation and decided to focus on the core Bumble app," said departing CEO Lidiane Jones.
Post earnings announcement, at least six brokerages have lowered their price targets for Bumble. The company currently trades at a price-to-earnings ratio of 9.98 times for the next 12 months, trailing its larger rival Match Group, which trades at a P/E ratio of 16.51.