On Thursday, Evercore ISI updated its outlook on Bumble Inc. (NASDAQ:BMBL), raising the price target to $18 from $17 while maintaining an Outperform rating. This adjustment follows Bumble's recent earnings report, which revealed a modest beat on quarterly results but also presented a softer guidance for the second quarter due to various challenges including foreign exchange headwinds and marketing spend shifts.
Bumble, known for its women-centric dating app, reported revenue of $268 million, slightly exceeding expectations by 1% compared to analyst predictions and matching Evercore ISI's forecast. The company's EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) also surpassed estimates, coming in at $74 million—7% and 8% higher than the Street and Evercore ISI projections, respectively. Additionally, the Bumble app saw a net add of 43,000 users, surpassing the anticipated figure by 9,000.
Despite the positive outcome, Bumble's guidance for the second quarter was modestly below expectations. The company forecasted revenue in the range of $269 million to $275 million, which fell short of the anticipated $278 million. The Q2 EBITDA guidance of $69 million to $73 million also came in slightly below the consensus, attributed in part to marketing expenses being deferred from the first to the second quarter.
The company reaffirmed its full-year 2024 guidance, projecting a revenue growth of 8%-11%, inclusive of a 1.5 percentage point impact from foreign exchange headwinds, and a 300 basis point margin expansion.
Despite mixed fundamental trends, with Q1 revenue growth decelerating and EBITDA margins expanding, partly due to the shifted marketing spend, Evercore ISI views the stock as reasonably priced at a multiple of 7X EV/2024 EBITDA. This valuation is supported by Bumble's mid-teens three-year EBITDA compound annual growth rate, as estimated by the firm.
InvestingPro Insights
Evercore ISI's recent price target increase for Bumble Inc. (NASDAQ:BMBL) is underpinned by the company's performance and future prospects. The InvestingPro data reveals a company with a market capitalization of $1.77 billion and a significant revenue growth of 16.42% over the last twelve months as of Q4 2023. Despite this growth, the company has been trading near its 52-week low, with a price 48.77% of its peak, reflecting the stock's volatility and the market's cautious sentiment.
InvestingPro Tips indicate that Bumble's management has been actively buying back shares, a sign of confidence in the company's value. Additionally, Bumble's liquid assets exceed its short-term obligations, suggesting financial resilience. However, it's important to note that Bumble has not been profitable over the last twelve months, and analysts have mixed views on its earnings potential, with some revising their earnings downwards for the upcoming period while others predict profitability this year.
For those looking to delve deeper into Bumble's financial health and future outlook, InvestingPro offers additional insights. There are 13 more InvestingPro Tips available, which could provide a more nuanced understanding of Bumble's investment potential. Interested readers can explore these tips and take advantage of a special offer using the coupon code PRONEWS24 for an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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