Bumble reported solid 1Q22 results, with an encouraging guide after stripping out impacts from worsening FX and the Russia/Ukraine conflict.
The Bumble App posted a strong 1Q driven by paying user growth and ARPPU expansion with broad-based strength driven by product enhancements and re-engagement of users who had fallen off the platform.
The emphasis in 2022 will be on broadening the app’s paying user base (whereas 2021 was more ARPPU-focused) with new geo expansions and lower-cost consumables and bundles.
Bumble is also ramping up its non-dating efforts with the next phase of testing of BFF and exploration of offline experiences and events through the Bee Key and Bumble IRL initiatives.
Badoo remains pressured by COVID concerns and the Russia/Ukraine war, with paying user declines expected to persist, somewhat offset by an ARPPU lift from lower-ARPPU users falling off the platform.
RBC Capital analyst Brad Erickson maintained an Outperform and lowered the price target from $35 to $30. BMBL had a solid Q1 and reiterated its FY guidance, including incremental headwinds due to Russia/Ukraine and worsening Fx.
Erickson views it as having an incredibly engaging narrative through the year as a reopening play with a product cycle story starting in Q3 that should drive the critical metric (net payer adds) and a model that should consistently drive operating leverage while trading at a very reasonable 12x EV/out-year EBITDA multiple.
BMO Capital analyst Daniel Salmon maintained an Outperform and lowered the price target from $48 to $45. Salmon believed BMBL’s Q1 results and steady outlook were solid in the face of higher exposure to Eastern Europe and FX pressure.
Product innovation and international expansion for Bumble will be the main company-specific drivers of 2022. Salmon likes the broader online dating space as COVID eases and singles look to connect more in person. Moreover, it can outperform in a recession due to the basic human need served.
Price Action: BMBL shares traded higher by 23.4% at $21.75 on the last check Thursday.
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