Bumble price target raised to $7 from $5 at RBC on revenue upside

Investing.com - RBC Capital raised its price target on Bumble Inc. (NASDAQ:BMBL) to $7.00 from $5.00 on Thursday, while maintaining an Outperform rating on the dating app company’s stock. The stock, currently trading at $6.52, has shown strong momentum with a 24.19% gain in the past week, though InvestingPro analysis indicates the stock is in overbought territory.

The price target increase follows Bumble’s positive preannouncement for the second quarter, which showed slight revenue upside. The company also announced a 30% reduction in force, though RBC noted that the cost savings would be largely reinvested. According to InvestingPro data, Bumble maintains strong financial health with a current ratio of 2.83, indicating solid liquidity management.

RBC based its new $7 price target on a multiple of 5.0x enterprise value to estimated 2026 EBITDA. The firm views potential stabilization in the Bumble brand and progress on new products as the most positive aspects of the announcement.

The investment bank acknowledged that questions may persist about management’s characterization of this as an "inflection point" for online dating, noting that the strategy appears largely idiosyncratic while industry headwinds continue.

RBC maintained its Outperform rating on Bumble stock, citing low expectations and valuations, but indicated it would look for "substantive progress with new products" to continue justifying the rating.

In other recent news, Bumble Inc. reported its first-quarter 2025 earnings, with revenue reaching $247 million, surpassing the projected $246.65 million. However, the company’s earnings per share (EPS) slightly missed expectations at $0.13 compared to the forecasted $0.14. Following these announcements, Bumble revised its second-quarter outlook, now projecting revenue between $244-$249 million and raising its EBITDA forecast to $88-$93 million. The company also announced a 30% reduction in headcount, aimed at optimizing execution, which is expected to generate approximately $40 million in annualized savings. In response to these developments, Evercore ISI raised its price target for Bumble to $7 from $6, maintaining an In Line rating. Similarly, UBS increased its price target to $6 from $5, while maintaining a Neutral rating, citing Bumble’s strategic shift towards enhancing membership quality. Meanwhile, Goldman Sachs raised its price target to $9 and kept a Buy rating, noting potential market opportunities despite uncertainties in Bumble’s turnaround timeframe. These recent developments reflect Bumble’s ongoing efforts to enhance financial performance and strategic positioning.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.