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On Thursday, Goldman Sachs reaffirmed its Buy rating and a $20.00 price target for Grindr (NYSE:GRND), following the company’s fourth-quarter earnings report. According to InvestingPro data, the stock has delivered an impressive 126.55% return over the past year and is currently trading near its 52-week high of $19.20, with analyst targets ranging from $20 to $24. Grindr’s management highlighted several key points during the earnings call, including the establishment of main goals for 2025. These goals focus on executing a strong product roadmap, expanding the Gayborhood feature, and enhancing Grindr’s global brand presence.
The fourth quarter’s revenue exceeded expectations, largely due to a significant direct brand campaign. The company’s strong performance is reflected in its 31.79% revenue growth over the last twelve months, with an impressive gross margin of 74.36%. Additionally, the company has reiterated its commitment to scaling investments in 2025. These investments are intended to support the product roadmap and to recruit engineering talent throughout the year. InvestingPro subscribers can access 10+ additional exclusive insights about Grindr’s financial health and growth potential.
With a market capitalization of $3.06 billion and a healthy current ratio of 1.46, Grindr announced a new $500 million share repurchase program, signaling a drive toward delivering capital returns. Despite ongoing discussions about the scale of investment in personnel and product development, and how these investments will translate into user growth and engagement in the medium to long term, Goldman Sachs views Grindr as a company with industry-leading margins, supported by its $106.14 million in EBITDA over the last twelve months. The analysts believe that incremental investments in 2025-2026 will support long-term initiatives for user growth.
Goldman Sachs’ endorsement of Grindr’s stock comes with the belief that the company’s user demographic and core proposition have consistently performed well amidst industry debates. These debates often concern user growth and engagement dynamics. The firm’s analysts are confident in Grindr’s robust product roadmap, which they expect will continue to foster long-term growth and engagement on the platform.
In other recent news, Grindr reported its financial results for the fourth quarter of 2024, revealing a notable 35% increase in revenue year-over-year, reaching $98 million and surpassing the forecasted $91 million. The company’s full-year revenue for 2024 was $345 million, marking a 33% increase compared to the previous year. Analysts at Raymond (NSE:RYMD) James responded to these results by raising Grindr’s stock target to $22, maintaining an Outperform rating. The analyst praised Grindr’s operational excellence and its strategic $500 million stock repurchase program, which represents about 15% of the company’s market capitalization. Grindr’s guidance for 2025 projects a revenue growth of 24% or higher, with an adjusted EBITDA margin of 41% or more. The company is also planning to launch a new product in the health and wellness space and expand its engineering team. Additionally, Grindr is investing in AI technology to enhance its product offerings, which is expected to contribute to its financial success. Despite these positive developments, the company’s stock experienced a decline in after-hours trading.
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