What Happened?
Shares of online dating app Bumble (NASDAQ: BMBL) fell 2.4% in the afternoon session after Goldman Sachs downgraded the stock from Buy to Neutral and lowered its price target to $7 from $8.
The investment bank pointed to low visibility into the dating app's turnaround. Analysts noted that Bumble's app downloads had dropped more than 35% compared to the previous year, partly because the company reduced its marketing efforts. The competitive environment also grew more challenging, as competitor Hinge continued to gain users while Tinder saw better international trends. Due to these factors, Goldman Sachs stated that it did not expect to see a significant improvement for the main Bumble app until the middle of 2026, viewing the stock's risk and reward as more balanced at its current price.
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 27 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 3 days ago when the stock dropped 4.2% on the news that a steeper-than-anticipated drop in U.S. consumer confidence raised alarms about future consumer spending.
The Conference Board reported its consumer confidence index fell to 94.2 in September, its lowest reading since April. The decline was attributed to growing pessimism among Americans regarding inflation and a weakening job market. This data is particularly concerning for companies reliant on discretionary spending, such as those in online retail, travel, and the gig economy, as reports suggest a bleak consumer outlook could curb spending on non-essential items and services. The survey's Expectations Index, a measure of short-term outlook, has remained below a key threshold that often signals a future recession, adding to investor concerns about the economic landscape.
Bumble is down 26.3% since the beginning of the year, and at $5.87 per share, it is trading 35.3% 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 $83.54.
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