The online dating industry is booming and Bumble (NASDAQ:BMBL) is making the most of it, but as its lockup period comes to an end, Bumble stock may present even more opportunity.
The pandemic has made it difficult to find love. Since none of us can walk into bars or meet our friends who can introduce us to potential partners, the only way to find love currently is online.
Bumble offers an online dating and social networking platform and has subscription-based dating products in various countries.
Post an impressive IPO run last month, Bumble stock has shown volatility after hitting an all-time high of $85 and is exchanging hands at $67. It has become a favorite stock of Wall Street after the smashing Q4 results.
I am bullish on the stock for the women-centric app and strong fundamentals. Let us take a look at the investment case for BMBL stock.
Strong Q4 Results and Bumble Stock
Bumble reported impressive Q4 results and a positive outlook for the present quarter. The company reported full-year revenue of $582.2 million from $488.9 million in the previous year.
Further, the company’s revenue increased to $165 million in Q4. It reported a net loss of $26.1 million and earnings per share of $0.01 for the quarter.
The company has a strong outlook for 2021. Bumble expects revenue between $163 to $165 million for the first quarter and full-year revenue of $716 to $726 million.
Considering the rollout of vaccines, people will be keen on getting on the app, and it will lead to more users and an increase in revenue. The company has high operating costs it will have to reduce to generate a profit in the coming quarters.
The operating costs for the year stood at $616 while the revenue is $542. Efficient cost management should help generate positive income.
Bumble Is a Different Dating App
Bumble sets itself apart from the rivals with its feature that allows only women to make the first move. This makes it a secure place for women willing to pay for the service.
Interestingly, the app has 2.7 million users who pay for the premium features. That number is up 32.5% from the previous quarter.
Paying users increased by 22% from Jan. 29 to Dec. 31 last year. This number could go up post-covid and generate high revenues for the company.
The average paying revenue per user is $20, it is expected that the company will gain strong momentum as the pandemic ends and this amount could go higher and so will BMBL stock.
People will be willing to step out and look for love after spending months at home. Additionally, Bumble is not restricted to people only looking for love.
It has the ability to reach out to a wider user base through its BFF feature and Bizz feature. This will set it apart from the competitors in the industry and will give a boost to the active user base.
The Bottom Line on BMBL stock
I am positive about the long-term prospects of the stock. I am not alone, Wall Street loves BMBL stock.
Jefferies analyst Brent Thill maintained a “Buy” rating and raised the price target to $82. The analyst cited strong Q4 results for the increase in price target. JP Morgan analyst Cory Carpenter reiterated a “Neutral” rating with a price target of $60 based on the Q4 numbers.
Cowen analyst John Blackledge also raised the price target to $74 and maintained an “Outperform” rating.
Bumble’s lockup period ends today and might provide the perfect opportunity to scoop up stocks on a post-lockup dip as early investors take profits. For now, BMBL stock is a buy.
On the date of publication, Vandita Jadeja did not have (either directly or indirectly) any positions in the securities mentioned in this article.