Bumble (BMBL) is one of the hottest IPOs to hit the market in several weeks. BMBL quickly soared on its first day of trading. Though the stock has only been available for trading since last week, it appears to have amassed quite the loyal investor following.
BMBL jumped an impressive 77% when it debuted last week. Though this dating company might not have a particularly bright future in the context of the short-term as social distancing continues during the pandemic, it has fantastic long-term potential.
Below, we provide a look at BMBL to determine if it is worthy of a position in your portfolio.
Why Interest in BMBL is so Strong
BMBL’s rapid ascent caught some investors by surprise, considering the fact that few people are dating during the coronavirus pandemic. Add in the fact that BMBL has plenty of competitors in Tinder, Hinge, OKCupid, and a seemingly endless number of other dating/hookup sites, and the stock’s rise is all the more intriguing.
It is worth noting Match Group (MTCH) owns the aforementioned dating/hookup apps. However, MTCH is not exactly a POWR Ratings superstar. MTCH has a D Grade in the POWR Ratings Sentiment component and C grades in the Growth, Value, and Momentum components. Since BMBL is so new, the company doesn’t have POWR Ratings yet, but you can find other top stocks in its industry here.
There is something to be said about the timing of BMBL’s IPO. The stock went public on February 11, a couple of days ahead of Valentine’s Day. However, it appears as though BMBL will be more than a mere blip on investors’ radar. The company has massive growth potential as it is the country’s second most popular dating app. Only the previously mentioned Tinder service is more popular.
BMBL’s Value Proposition
BMBL’s unique twist on the internet dating game is its empowerment of women. Women who sign up to use BMBL are provided with more control than they enjoy on other apps. In fact, the BMBL platform is centered on women sending the first message as the optimal approach to forming relationships. Social norms have long dictated that men make the first move, so BMBL’s unique approach is certainly intriguing. Only time will tell as to whether women relish the role of initiator.
Is BMBL a One-trick Pony?
If you are hesitant to park your investing dollars in a business that provides an online dating service and nothing else, you will be comforted by the fact that you are not alone. Thankfully, BMBL’s business extends well beyond a single dating website. BMBL operates Badoo, a social network and dating service headquartered in London. Badoo provides people with the opportunity to form new romantic relationships and friendships with its nearly 500 million users.
BMBL also owns and operates several additional dating apps to boot. BMBL’s most popular dating service has 40 million monthly active users (MAUs), making it quite an impactful standalone business. There is a good chance all of BMBL’s dating services will enjoy an uptick in business as society returns to normal in the months ahead following the pandemic. After all, most people have spent most of their time indoors, staring at screens instead of interacting with other people. BMBL will help love-seekers return to normal, meet new flames, and live a truly social life in every sense of the word.
BMBL’s Business Model
The BMBL freemium model empowers users to join the platform at no cost and match with potential flames without paying a single penny. BMBL revenue is primary generated through purchases while using the app. BMBL also makes money through subscription services such as Bumble Boost, a service that costs $12.99 per week.
Users can also upgrade to the Bumble Premium service that costs $17.99 each week. The logic in paying for such services is it expands user agency, empowering love-seekers to feature their profile on the site, view the order of “likes” of the profile, change their status, and more.
Is BMBL Worthy of a Position in Your Portfolio?
BMBL’s unique approach to dating will likely prove successful. The company’s empowerment of women has the potential to make BMBL the top online matchmaker in the world within a few years.
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BMBL shares were trading at $76.82 per share on Wednesday afternoon, down $2.07 (-2.62%). Year-to-date, BMBL has declined N/A%, versus a 4.57% rise in the benchmark S&P 500 index during the same period.
About the Author: Patrick Ryan
Patrick Ryan has more than a dozen years of investing experience with a focus on information technology, consumer and entertainment sectors. In addition to working for StockNews, Patrick has also written for Wealth Authority and Fallon Wealth Management. More...
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