What Happened?
Shares of online dating app Bumble (NASDAQ: BMBL) fell 2.3% in the afternoon session after a UBS analyst lowered the price target on the stock to $5.00 from a previous $6.50. While UBS analyst Kunal Madhukar maintained a 'Neutral' rating on Bumble, the revised price target represented a 23% decrease. The adjustment followed similar downward revisions from other analysts in recent weeks, signaling increased caution surrounding the company's valuation.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Bumble? Access our full analysis report here.
What Is The Market Telling Us
Bumble’s shares are very volatile and have had 29 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 5 days ago when the stock dropped 17.7% on the news that the company reported a significant drop in paying users for its third quarter and issued weak guidance for the upcoming quarter.
The online dating app's third-quarter sales fell 10% year on year to $246.2 million, meeting Wall Street's expectations. However, a key point of concern was the 16% drop in paying users, a loss of about 680,600 people from the same period in the previous year. Looking ahead, Bumble's revenue forecast for the next quarter was $220 million at the midpoint, which fell short of analyst estimates. The company also guided for lower-than-expected adjusted EBITDA, signaling further challenges.
Bumble is down 50.4% since the beginning of the year, and at $3.96 per share, it is trading 56.4% below its 52-week high of $9.08 from November 2024. Investors who bought $1,000 worth of Bumble’s shares at the IPO in February 2021 would now be looking at an investment worth $56.25.
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