Bumble Inc.’s stock (BMBL) experienced a steep decline last week, following a disappointing revenue report that raised concerns about the company’s ability to thrive in the crowded dating app landscape.
After the closing bell on Wednesday, Bumble’s shares plummeted by 30%. The company’s second-quarter revenue of $268.6 million fell short of analyst expectations by 1.6%. Adding to the disappointment, Bumble’s forecast for third-quarter revenue, projected to be $272 million at the midpoint, missed consensus by a significant 8.2%.
Analysts are expressing caution about Bumble’s future. Eric Sheridan, an analyst at Goldman Sachs, wrote in a note on Friday, “At current share price levels, we believe BMBL is no longer pricing in any element of either compounded revenue growth, stable/upward trajectory margins and/or an ability to achieve wider industry growth.”
Despite the negative outlook, Goldman Sachs maintained a Buy rating on the stock, which closed at $5.75 on Monday, down 3.93%. It’s worth noting that in early March 2021, Bumble’s stock was trading at over $70 per share.
Bumble founder Whitney Wolfe Herd, who stepped down as CEO in January and handed the reins to Lidiane Jones, has hinted at a strategy to integrate artificial intelligence (AI) into the app to enhance matchmaking. In a May interview, she suggested a future where AI could act as a “dating concierge.”
However, when contacted by Benzinga on Monday, neither Herd nor Jones were available for interviews regarding the company’s AI plans.
The decline in Bumble’s stock also impacted exchange-traded funds (ETFs) that track the company. The Trenchless Fund ETF (RVER) gained 0.35%, while the Hypatia Women CEO ETF (WCEO) dipped 0.53%. The Fidelity Disruptive Communications ETF (FDCF) rose by 0.39%, and the Fidelity Metaverse ETF (FMET) saw a slight increase of 0.025%.
Bumble’s future in the competitive dating app market remains uncertain. The company’s ability to leverage AI and attract new users while addressing concerns about its revenue growth will be critical to its success.
