On Monday, KeyBanc has adjusted its price target for shares of Bumble Inc. (NASDAQ:BMBL), a technology company operating online dating platforms. The price target has been reduced to $16.00 from the previous $18.00, but the firm has decided to maintain an Overweight rating on the stock.
The adjustment comes after an analysis of first-quarter customer trends at Tinder, which indicated some signs of stabilization. Despite this, year-over-year declines were still significant. KeyBanc's review relied on their Key First Look data, which includes credit and debit card transactions.
The firm has highlighted the importance of the upcoming first-quarter earnings reports for both Match Group (NASDAQ:MTCH) and Bumble. Investors are looking for detailed explanations on how these companies plan to improve trends without negatively affecting profit margins. Bumble, in particular, is expected to clarify its strategy, which includes an app refresh and restructuring actions.
For Bumble, KeyBanc has made minor quarterly adjustments based on the timing of the app refresh, which had an immaterial impact on the 2024 and 2025 revenue and EBITDA forecasts. The new price target reflects a valuation of 9 times the estimated 2025 EV/EBITDA, which maintains a more than two-turn discount compared to Match Group.
Match Group also experienced a price target revision, with KeyBanc lowering it to $46, based on 11.5 times the estimated 2025 enterprise value to adjusted operating income. Both companies are expected to stabilize and enhance shareholder returns in the future, according to KeyBanc's analysis.
InvestingPro Insights
In light of KeyBanc's recent price target adjustment for Bumble Inc. (NASDAQ:BMBL), current InvestingPro data and insights can provide additional context for investors. Bumble's market capitalization stands at approximately $1.78 billion, with a notable gross profit margin of over 70% in the last twelve months as of Q4 2023. Despite the company's current negative P/E ratio, which signals that it is not profitable over the past year, analysts predict a return to profitability this year.
An InvestingPro Tip worth noting is that Bumble's management has been proactively buying back shares, a move that often reflects confidence in the company's future performance and a potential upside for investors. Additionally, the company has a high shareholder yield, further underscoring management's commitment to returning value to its shareholders.
For those considering an in-depth analysis, there are 13 additional InvestingPro Tips available for Bumble Inc., which could provide a more comprehensive understanding of the company's financial health and future outlook. By using the coupon code PRONEWS24, readers can get an extra 10% off a yearly or biyearly Pro and Pro+ subscription, offering valuable insights for making informed investment decisions.
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