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UBS analysts lowered their price target from $4.50 to $3.00. This is a target, which is the price a firm thinks the stock will reach in the next year. The firm kept its rating at neutral, meaning they do not see a clear reason to buy or sell the stock right now. This change reflects the difficult path ahead for the dating app. Bumble is currently shrinking its user base on purpose to focus on members who spend more money, but that shift makes it harder for analysts to predict when total revenue will stop falling. While the new target is lower, it is still slightly above where the stock trades today.
Source: UBS
Bumble is officially ending the rule that only allowed women to start a conversation. This change removes the central feature that set the app apart from rivals like Tinder for over a decade. The company is making the move to reduce the pressure on women to always lead and to help matches turn into conversations more quickly.
For a long-term owner, this is a major shift in brand identity. Bumble is currently struggling with a shrinking user base and falling revenue, so it is moving away from its original niche to act more like a standard dating app. While this might make the app easier to use, it also risks losing the specific reputation that made people choose Bumble over other platforms in the first place.
Bumble is shifting its focus toward real-world meetups and group settings through a new app called Plans. This move is part of a broader effort to move past the traditional swiping model, which has seen declining interest from younger users who are increasingly tired of standard online dating apps.
This shift is a direct response to the shrinking user base we have seen in recent quarters. By focusing on group events and in-person connections, Bumble is trying to find a new way to stay relevant. For long-term owners, the success of this pivot is critical because the core business is currently losing members, and the company needs a new way to prove it can still attract and keep a younger audience.
Bumble brought in about 211 million dollars last quarter, a 15 percent drop from the same time last year. The company also reported a net loss of 128 million dollars, or 84 cents per share, which was much worse than the profit analysts expected. Management is currently trying to overhaul the app to attract younger users, but this transition is proving painful as the total number of paying members continues to shrink.
The business is at a crossroads. While it is still generating about 73 million dollars in adjusted EBITDA, a measure of cash profit that ignores certain one-time costs, the shrinking user base is a major concern. For the stock to recover, the company needs to prove that its new AI features and app redesign can stop people from leaving and convince more members to pay for premium features.
See the full quarter, and how our tracked metrics did
Source: 8-K filing
Management has struggled to set a reliable bar, with results swinging from massive surprises to unexpected losses as the business shrinks.
| Expectation | |
|---|---|
| EPS | $0.24 |
| Revenue | $210M |