Dating app Bumble (NASDAQ: BMBL) saw its shares soar by a whopping 41.9% yesterday. However, the Texas-based firm still remains down over 32% year-to-date (YTD). Investors will be hoping this sparks a reversal in fortunes from the steady decline experienced since the company debuted via IPO in February of 2021.
So, what sparked this sudden rise?
Why did Bumble’s stock go up?
Earnings. The company posted revenue of $208.2 million for the fourth quarter, representing a 25.7% year-over-year (YoY) increase. Fears had been mounting that the current war between Russia and Ukraine would affect the stock significantly, with the company’s ‘Badoo’ app relatively popular in Eastern Europe.
Despite Bumble making the decision to discontinue operations in Russia, investors were kept happy by the fact that its flagship ‘Bumble’ app had grown its revenue by 42.2% to $150.5 million — more than making up for the forced loss of users.
Bumble also offered a positive outlook for 2022, with full-year revenue forecasted to amount to between $934 million and $944 million. This would roughly equate to a 23% growth rate compared to 2021.
So, should I buy Bumble stock?
Despite Bumble experiencing its strongest trading day ever, investors should be reminded that prior to that, the stock had hit all-time lows. The return of in-person dating following the pandemic, a general rotation away from growth stocks, and current geopolitical issues could all conspire to hinder the company’s forecasted growth.
Bumble CFO, Anu Subramanian, was bullish in her assertion that “continued international expansion and product innovation” will drive strong growth during 2022, but with markets as volatile as they are right now, nothing is certain.
Bumble undoubtedly holds a lot of positive underlying factors, and its willingness to commit to growth — as shown by its recent purchase of French app ‘Fruitz’ — should excite existing shareholders. This earnings report could very well go down as a landmark day for the firm as it finally turns around its slide. But, predicting the bottom of a stock is impossible. Bumble’s price is certainly tantalizing right now but be prepared for further volatility in the short term.
Long term, Bumble still appears to be an attractive stock with great leadership, a culture of innovation, and a strong share of the market.
Financial Writer at MyWallSt
Pádraig’s favorite stock is Nike. Growing up as a sports fanatic, seeing Nike collaborate with athletes like Jordan, Lebron, and Ronaldo inspired him and cemented the brand in his mind. Now, despite having failed miserably in his attempts to earn a fabled Nike sponsorship, he still believes in the innovation and creativity behind Nike and is convinced they will only grow stronger as the world's leading sports brand.