What Happened?
Shares of online dating app Bumble (NASDAQ: BMBL) fell 5.2% in the morning session after JP Morgan downgraded the stock from Neutral to Sell and assigned a $5 price target, implying a potential 10% downside. The downgrade was attributed to challenges in the dating app market, particularly concerning "Gen Z product and market fit issues." The firm also raised concerns about competition from Hinge.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Bumble? Access our full analysis report here, it’s free.
What The Market Is Telling Us
Bumble’s shares are very volatile and have had 29 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 26 days ago when the stock gained 23.8% on the news that the company reported decent first quarter 2025 results which included optimistic EBITDA guidance for next quarter that blew past analysts' expectations.
On the other hand, its revenue guidance for next quarter missed. Separately, Bumble named Vivek Sagi as its new Chief Technology Officer, indicating the company's focus on product innovation and AI-led features. Zooming out, we still think this was a decent quarter featuring some areas of strength.
Bumble is down 31.7% since the beginning of the year, and at $5.44 per share, it is trading 54.1% below its 52-week high of $11.84 from June 2024. Investors who bought $1,000 worth of Bumble’s shares at the IPO in February 2021 would now be looking at an investment worth $77.44.
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