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On Thursday, UBS analyst Chris Kuntarich adjusted the price target for Bumble Inc. (NASDAQ:BMBL) stock, increasing it to $6.00 from the previous $5.00 while keeping a Neutral rating on the company’s shares. The stock has shown recent momentum with a 7.73% gain over the past week, though it remains down 26.41% year-to-date. According to InvestingPro analysis, the company appears undervalued based on its Fair Value metrics. The revision comes as Bumble plans to reduce its marketing expenditure by $20 million in the second quarter compared to the first quarter and has identified $15 million in cost savings.
The UBS analyst’s statement highlighted that the forecast for Bumble’s fiscal year 2025 revenue has been slightly reduced by 0.7%, but the EBITDA expectation has been raised by 22%. With current EBITDA at $252.99M and an EV/EBITDA multiple of 6.2x, InvestingPro data shows the company maintains strong financial metrics despite challenges. The changes in estimates are a response to the anticipated short-term softening of new paying users as the company implements its cost-cutting measures.
Kuntarich noted Bumble’s strategic shift towards enhancing the quality of its membership base. However, he indicated that the successful execution of this strategy is expected to require time. The analyst expressed uncertainty regarding Bumble’s ability to increase pricing and, consequently, accelerate gross profit growth.
The UBS analyst’s commentary concluded with a cautious stance on Bumble’s stock, suggesting that until there is visible impact from the decreased marketing spend and any potential needs for reinvestment become clear, estimates could be subject to risk. He also mentioned that the potential for multiple expansion from 5 times EBITDA might be limited, reinforcing the Neutral position on the stock.
In other recent news, Bumble Inc. reported its first-quarter 2025 earnings, revealing a slight miss on earnings per share (EPS) but surpassing revenue expectations. The company posted an EPS of $0.13, just below the forecasted $0.14, while revenue reached $247 million, exceeding the projected $246.65 million. Bumble’s flagship app contributed $202 million to the total revenue, with total paying users reaching 4 million. The company continues to focus on AI enhancements and international market expansion, with cost-saving measures and organizational efficiency as top priorities. Goldman Sachs analyst Alexandra Steiger raised the price target for Bumble shares to $9.00, up from $8.00, while maintaining a Buy rating. This revision reflects adjustments to forward operating estimates based on the latest earnings report and management’s forward-looking statements. Bumble’s management has outlined a strategic focus on improving user experiences and enhancing its core product offerings through artificial intelligence and machine learning. Despite uncertainties regarding the timeframe of Bumble’s turnaround, these developments are seen as an opportunity for investors to reevaluate the company and its market segment.
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