The rebound comes after years of losses and eroding investor confidence, with the stock losing half its value in the past year as growth in the online dating market slowed amid fierce competition.
CEO Whitney Wolfhard is betting that a revamped product could spur growth and appeal to younger consumers who complain of souping fatigue.
The company is preparing to launch Bumble 2.0, which uses artificial intelligence to enhance quick photo swipes with a scrollable profile of short chapters that reflect a user’s interests, lifestyle and personality. Heard also said that Bumble could experience a “no swipe” experience in some markets.
However, analysts sounded a note of caution about the degree to which the redesign would change Bumble’s fortunes. They see signs of “meaningful innovation” in an industry that has seen little change since swap-based design became the standard.
The history category has “many false starts,” analysts at Jefferies said. “While the initial signs of stability are encouraging, we need to see more sustained progress for recovery.”
Dating apps such as Matchgroup Hinge are also developing AI-powered tools aimed at improving the user experience to win back younger users as dating app competition adapts to changing preferences. Bumble reported fourth-quarter revenue of $224.2 million, compared to analysts’ average revenue of $2 million. Users rose 7.9% to $22.20. Its performance-marketing cost has fallen by more than 80% year over year.
Analysts at Raymond James said the near-term momentum for Bumble still depends on the stability of paying users and proves that the post-reorganization ecosystem can grow without a heavy reliance on paid acquisitions.
The stock trades at 3.55 times its estimated earnings for the next 12 months, compared with 11.05 times for the peer group.
