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On Wednesday, JMP Securities analyst Nicholas Jones reaffirmed a positive outlook on Grindr (NYSE:GRND), maintaining a Market Outperform rating and a price target of $21.00 for the company’s shares. The stock, currently trading at $18.05, has delivered an impressive 121.2% return over the past year. According to InvestingPro data, analyst consensus remains bullish with targets ranging from $18 to $21. Jones highlighted Grindr Inc.’s continuous progress in its product development, with the introduction of new products and features that are expected to drive an increase in the number of paying users and average revenue per paying user (ARPPU). This strategy appears to be working, as InvestingPro data shows revenue growth of 31.79% in the last twelve months, with analysts forecasting 33% growth this year. This, in turn, is anticipated to bolster strong top-line growth and lead to industry-leading profit margins, supported by the company’s robust 74.36% gross margin.
Grindr’s commitment to its product roadmap is seen as a key factor in potentially exceeding current financial estimates. Jones bases the $21 price target on an enterprise value to estimated 2026 earnings before interest, taxes, depreciation, and amortization (EV/2026E EBITDA) multiple of approximately 22 times.
The company’s open architecture and grid interface are central to the app’s functionality, fostering a high-frequency chat environment. Grindr’s platform has facilitated over 130 billion chats in the past year, indicating high user engagement. On average, users spend more than an hour per day on the app, which is a testament to the platform’s ability to retain user attention and engagement.
The analyst’s comments reflect confidence in Grindr’s strategy and its ability to maintain its momentum in the market. The emphasis on user engagement and the company’s innovative approach to product features are seen as pivotal elements for future growth. Grindr’s stock rating and price target by JMP Securities remain unchanged as the company continues to execute its strategic initiatives.
In other recent news, Grindr has provided an upbeat financial outlook, projecting its full-year 2024 revenue to range between $343 and $345 million, marking a 32%-33% year-over-year increase. This surpasses the company’s previous guidance of at least 29% growth. The company also reaffirms its expectation for an adjusted EBITDA margin of 42% or greater for the year. Analysts from TD Cowen and Raymond (NSE:RYMD) James have reacted positively, with TD Cowen raising its price target to $20 and maintaining a Buy rating, and Raymond James increasing its target to $21 while keeping an Outperform rating. Both firms cite Grindr’s strong revenue growth and strategic initiatives as key factors in their optimistic outlooks. Additionally, Grindr announced plans to redeem outstanding public and private placement warrants, with a redemption price set at $0.10 per warrant. The redemption process will be completed by February 24, 2025, and the warrants will be delisted from the New York Stock Exchange on February 21, 2025. JMP Securities also maintained its Market Outperform rating for Grindr with a steady price target of $21, highlighting the company’s updated 2024 guidance and strong performance. Investors await Grindr’s fourth-quarter and full-year 2024 financial results, which are scheduled for release in March 2025.
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