Bumble (BMBL) stock plunged over 30% on Wednesday after the online dating app provider reported mixed Q4 results and issued a weak Q1 revenue guidance. Following the earnings release, several Wall Street analysts rushed to lower their price targets on BMBL stock, citing concerns over the company’s near-term performance.
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In a quick update, Bumble’s fourth-quarter revenues of $261.6 million were down 4.4% year-over-year but came slightly above the analysts’ estimate of $260.47 million. Meanwhile, Bumble’s adjusted EBITDA came in at $72.5 million, in line with expectations but lower than the $73.7 million in the year-ago quarter.
Here’s How Analysts Reacted Post BMBL’s Q4 Results
Analysts gave mixed reactions to Bumble’s Q4 earnings report. While none of them downgraded BMBL stock, two analysts maintained a Buy rating, six rated it a Hold, and one assigned a Sell. Also, most of them cut down their price targets on the stock.
- Analyst Matthew Farrell, CFA, from Piper Sandler: Farrell maintained a Hold rating on the stock but lowered the price target to $7 (24% upside from current level) from $8.
- Stifel Analyst Mark Kelley: The five-star analyst reiterated a Hold rating and reduced the price target to $6 (6.3% upside) from $7.
- RBC Capital analyst Brad Erickson: Another Top-rated analyst, Erickson cut its price target to $7 from $8, while maintaining a Buy rating on Bumble stock.
- Analyst Ygal Arounian from Citi: Citigroup (C) analyst also lowered its target to $6.8 (20.5% upside) from $8 and maintained a Hold rating on the stock.
- Bank of America Securities analyst Curtis Nagle: Nagle remains bearish about BMBL’s prospects. He reiterated a Sell rating and assigned the lowest price target to BMBL stock of $5.5 (2.6% downside) down from $5.75.
Key Concerns Driving Analysts’ Price Cuts
Some of the key concerns highlighted by the analysts include:
- Weak Revenue Guidance: Bumble’s revenue forecast for the first quarter of 2025 is between $242 million and $248 million, which reflects a year-over-year fall of 7% to 10%. Also, the outlook fell short of analysts’ expectations of $257.2 million. This weak guidance has raised concerns about the company’s growth potential.
- Declining User Engagement: Bumble reported a sequential drop in paying users in Q424 and expects a further decline of 100,000 to 120,000 users in the first quarter of 2025. These trends highlight the ongoing struggles Bumble is facing to maintain user engagement and drive revenue growth in a competitive online dating market.
- Management Turnover and App Refresh: Bumble is undergoing some major changes. The recent return of founder Whitney Wolfe Herd as CEO has raised concerns about leadership stability. Also, BMBL’s broad-ranging app refresh, which includes discontinuing the Fruitz and Official dating apps created uncertainty about the company’s near-term performance.
Despite these concerns, some analysts remain optimistic about Bumble’s long-term growth prospects. They believe the company’s efforts to improve user engagement, focus on product innovation, and the new CEO’s commitment to achieving strategic goals might drive sustainable growth over time.
Is Bumble Stock a Good Investment?
Turning to Wall Street, BMBL stock has a Hold consensus rating based on two Buys, eight Holds, and one Sell assigned in the last three months. At $7.23, the average Bumble stock price target implies 28.08% upside potential. Shares of the company have declined 27.2% over the past six months.
