Shares of Bumble Inc. have fallen 28% over the past month, but one analyst believes investors are misunderstood the company’s story.
While Bumble’s stock Bmbl,
Coming under pressure after its most recent earnings report showed a slowdown in app payers, JPMorgan’s Corey Carpenter said the online-dating company isn’t getting enough credit for its user-growth trends and retention momentum. Is. He upgraded the stock from neutral to overweight on Tuesday.
Shares of Bumble are up 12.2 percent in Tuesday morning’s trading.
Carpenter feels more excited about Bumble’s prospects after a recent conversation with the company’s management team. For one, Bumble executives largely attributed the slowdown in app payers to a temporary payment change made by the company within the Google Play app store, leaving Carpenter with the impression that the company’s issues were “transient”. ” Huh.
He was also encouraged by the company’s discussion of user-growth trends. While third-party data indicated that Bumble’s monthly-active-users (MAUs) increased 21% on a year-over-year basis, Carpenter noted a comment from Bumble’s management team that The company’s daily-active-users (DAU) growth is outpacing the growth of MAUs.
Plus, Carpenter is now less “skeptical” about Bumble’s efforts beyond the dating landscape. The company is shifting its BFF offering to focus on community building, rather than allowing users to swipe up on the profiles of potential new friends.
“We have historically been skeptical of BFF, but we are warming to it and we like the vision of the product revamped around communities and shared interests,” he wrote.
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Bumble’s stock, which went public in February, closed at a record low on December 3. It has fallen 35.4% over the past three months, while the S&P 500 index SPX,
increased by 3.5%.
Bumble previously didn’t do much to improve the BFF product since it launched in 2016, but recent changes mean it’s easier for users to switch between dating and BFF options on Bumble’s app , based on early tests BFF usage has increased, per carpenter .
“We are comfortable that management will remain disciplined around the level of its investment in BFF, and if nothing else, BFF increases the lifetime value of customers and helps reduce the inherently high churn of dating apps,” said Carpenter. wrote. “We see a path for more direct monetization through advertising, creators, or consumables over time, although we do not model any significant BFF contributions at this time.”
Carpenter became at least the second analyst in recent days to upgrade Bumble’s stock, joining Raymond James analyst Andrew Maroque, who turned bullish on Nov. 29.