Shares of dating app operator Bumble Inc. (BMBL) plummeted 23.25% in pre-market trading on Thursday, following a trifecta of negative factors: disappointing third-quarter results, a weak fourth-quarter outlook, and subsequent analyst downgrades.
For the third quarter, Bumble reported a 10% year-over-year decrease in total revenue, falling to $246.2 million. More alarmingly, the company's total paying users saw a substantial 16% decline, dropping to 3.6 million from 4.3 million in the same period last year. This reduction in the user base has directly impacted the company's financial performance.
Adding to investor concerns, Bumble's fourth-quarter revenue forecast fell significantly short of analyst expectations. The company projected total revenue between $216 million and $224 million, well below the $233.3 million analysts had anticipated. This weak outlook suggests that Bumble's challenges may persist in the near term, despite CEO Whitney Wolfe Herd's emphasis on ongoing transformation efforts focused on improving member base quality, driving engagement, and incorporating AI into their platform.
In response to these developments, several analysts have downgraded Bumble or cut their price targets. RBC downgraded Bumble to Sector Perform from Outperform and reduced its price target to $5 from $7.50. Jefferies also lowered its target price for Bumble to $5 from $6.5, while Wells Fargo cut its target to $5.5 from $7. These analyst actions further contribute to the negative sentiment surrounding the stock, as reflected in the significant pre-market plunge.
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