Key points:
- BMBL stock soars nearly 30% on Q4 earnings, despite Wall Street miss
- Suspending Russian operations swiftly dealt with a mounting risk
- BMO Capital analyst argues for a 150% upside in Bumble shares
- Bumble Acquire Dating App Fruitz
Shares in digital dating group Bumble soared over 27% in Wednesday premarket trading after the company posted mixed Q4 results, narrowly missing Wall Street estimates but trimming overall losses and discontinuing operations in Russia – sending stock soaring in after-hours trading last night. For some time now, Bumble has arguably taken the back seat in the dating industry, following Match Group’s undisputed success with Match, Tinder and Hinge. However, consistent annual growth in Bumble App is attracting long-term investors.
The company posted revenue of $208.2M in Q421, a 25.7% year-on-year increase from $165.6M. Investors paid keen attention to losses last night, with Bumble posting $14.7M in Q4, narrowed from $26.1M in the prior year. Overall, the company recorded an adjusted EBITDA of $54.8M, an increase from $44.1M in Q420. Still, the numbers didn’t quite hit Wall Street expectations, falling slightly short.
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Investors also jumped on the decision to suspend operations in Russia and Belarus; despite the countries contributing to a combined revenue of about 2.8%. The company has already announced they expect a $2M hit in Q1 from the decision, but still forecast revenue of between $207M – $210M.
CEO Whitney Wolfe Herd stated:
“In our first year as a public company, and with our mission at the forefront of everything we do, we successfully executed on our core strategic priorities: driving scale and engagement, increasing monetization, and improving profitability”
Following the company’s positively interpreted earnings, BMO Capital analyst Daniel Salmon upgraded BMBL to Outperform from Market Perform, with arguments that the online dating market is “poised to outperform” the internet sector. International expansion, acquisitions, and new launches are all catalysts for Bumble’s growth; Salmon expects a 150% upside from current BMBL pricing.
