Bumble (BMBL) stock is spiraling Wednesday after the online dating platform beat revenue expectations for its fourth quarter but issued guidance for its first quarter that came in well below expectations.
In the quarter ending December 31, Bumble's revenue decreased 4.4% year over year to $261.6 million. Its EBITDA (earnings before interest, taxes, depreciation and amortization) slipped 1.6% from the year-ago period to $72.5 million.
"We achieved our fourth-quarter financial objectives, while outperforming our outlook for Bumble app, by advancing our strategic objectives with discipline and focus," said Bumble Chief Financial Officer Anu Subramanian in a statement. "Over the coming year, the company plans to build upon the strong foundation it has established, with a regular cadence of product innovation and by continuing to operate with discipline and rigor."
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
The company's top-line results topped analysts' expectations. Wall Street was anticipating revenue of $260 million, according to MarketWatch.
Bumble also said total paying users increased 5.3% to 4.2 million and total average revenue per paying user was down 9.1% compared to the year-ago period to $20.58.
Sentiment turned negative toward Bumble when the company provided its outlook for its first quarter. BMBL said it expects revenue in the range of $242 million to $248 million, which came in well below analysts' expectations for revenue of $256.9 million.
Is Bumble stock a buy, sell or hold?
Today's price action is just more of the same for Bumble, which was down 40% year over year heading into Wednesday's session. Unsurprisingly, Wall Street is on the sidelines when it comes to the communication services stock.
According to S&P Global Market Intelligence, the average analyst target price for BMBL stock is $7.39, representing implied upside of over 17% to current levels. This is likely due to analysts being unable to keep up with Bumble's slide vs anticipation of a big rally. Meanwhile, the consensus recommendation is a Hold.
Financial services firm Stifel maintained its Hold rating on the small-cap stock following the earnings release and lowered its price target to $6 from $7.
"We view Bumble as one of the most innovative companies in the global online dating space, offering a compelling and differentiated value proposition for consumers, which could lead to a long runway of paying user/average revenue per paying user growth and a multi-year operating leverage story," says Stifel analyst Mark Kelley.
But Kelley admits that Bumble is "now undergoing a thorough strategy reset" and its efforts to "refresh its product mix" have "no tangible timeline."
Kelley added that competition remains intense in the online dating industry.
Related Content
-
Small Businesses Are Racing to Use AIThe Kiplinger Letter Spurred on by competitive pressures, small businesses are racing to adopt AI. A recent snapshot shows the technology’s day-to-day uses.
-
The Me-First Rule of Retirement SpendingFollow the 'Me-First" rule and you won't have to worry about running out of money when the stock market goes south.
-
I'm a Financial Planner: Could Partial Retirement Be the Right Move for You?Many Americans close to retirement are questioning whether they should take the full leap into retirement or continue to work part-time.
-
From Mortgages to Taxes to Estates: How to Prepare for Falling Interest RatesAs speculation grows that the Federal Reserve will soon start lowering interest rates, now is a good time to review your financial plans for housing, estate, taxes, investing and retirement to make the most of potential changes.
-
This Is How Lottery Winners Build Lasting Legacies, From a Financial ProfessionalWinning a massive lottery jackpot, like the recent $1.4 billion Powerball, requires seeking immediate legal and financial counsel, protecting your identity and winnings and planning your legacy.
-
S&P 500 Slips Ahead of Fed Week: Stock Market TodayAll eyes are on the Federal Reserve ahead of next week's critical policy meeting.
-
September Fed Meeting: Live Updates and CommentaryThe September Fed meeting is a key economic event, with Wall Street keyed into what Fed Chair Powell & Co. will do about interest rates.
-
I'm an Investment Strategist: This Is How the Fed's Next Rate Move Could Impact Your WalletInterest rate cuts might be coming, which could affect everything from your credit card debt to your mortgage. It's smart to prepare now — here's how.
-
I'm a Retirement Planner: These Are Three Common Tax Mistakes You Could Be Making With Your InvestmentsDon't pay more tax on your investments than you need to. You can keep more money in your pocket (or for retirement) by avoiding these three common mistakes.
-
Want to Shave 10 Hours Off Your Workweek? A Startup Expert Shows How AI Can HelpArtificial intelligence is overhauling how companies operate, freeing up entrepreneurs and their workers to skip the menial stuff and get down to business.
