Bumble Inc. Q3 Earnings Report Analysis
BofA Securities analyst Curtis Nagle maintained an Underperform rating on Bumble Inc. (BMBL) with a revised price target of $5.75, up from $5.50. This adjustment comes after Bumble's third-quarter earnings report surpassed expectations due to operational expense (OPEX) efficiency improvements.
Revenue reached $273.6 million, meeting guidance and exceeding analyst expectations of $271.7 million.
Adjusted EBITDA came in at $82.6 million, exceeding projections of $78.8 million.
Bumble app revenue declined 1% year-over-year, while Average Revenue Per Paying User (ARPPU) decreased by 10% to $25.58 due to a shift towards international markets.
Badoo app saw a 14% year-over-year increase in paying users, exceeding the previous quarter's 12% increase.
Bumble's adjusted EBITDA margin reached 30%, up 290 basis points year-over-year.
The company repurchased $90 million of its stock during the quarter and an additional $30 million in October.
Bumble's guidance for the fourth quarter places revenue at $259 million and EBITDA at $72 million.
The company reaffirmed its fiscal 2024 revenue outlook of $1.069 billion, suggesting a 1.6% year-over-year growth.
Bumble anticipates at least a 200-basis-point improvement in annual EBITDA growth.
Nagle adjusted his estimates slightly upwards for 2024 based on stronger-than-expected OPEX efficiencies. He raised his revenue projection for the fourth quarter to $261 million and for 2024 to $1.071 billion. However, he expresses caution on Bumble's outlook, noting that growth in paying users will likely take time to recover due to macroeconomic pressures and ongoing product investments.
Nagle raised the price target to $5.75, applying a 4.3 times 2025 EV/EBITDA multiple. He believes the discount is justified due to slower user growth trends and high private equity sponsor ownership.
BMBL stock is up 10.20% at $8.90 at last check Monday.