The average target price of BMBL is 5.7 and suggests 6% downside potential. Usually, this means a SELL recommendation among investment firms, or a recommendation to decrease one's position in this instrument in the next 12 months. The most optimistic analyst has a target price of 8.0. This translates into 31% upside potential in the best case. On the other hand, the most pessimistic analyst has a target price of 4.0. This is equivalent to 35% downside potential in the worst case. 

Bumble Inc. provides online dating and social networking platforms in North America, Europe, internationally. It owns and operates websites and applications that offers subscription and in-app purchases dating products. The company operates two apps, Bumble and Badoo with approximately 40 million users on monthly basis, as well as Fruitz, an online dating app. Bumble Inc. was founded in 2014 in and is headquartered in Austin, Texas.

Bumble Inc.

Technology

The company does not pay dividends at all, or it pays them sporadically. There have only been a few years with dividend payments in the past ten years. 

BMBL reported revenue of USD 1 051mn in the last 12 months, down 2% from FY24. At the same time, the dynamics of cash flow, as measured by free cash flow (FCF), were drastically different. EPS grew 1% from FY24 to USD -4.69. Market expects EPS to reach USD -4.45 in FY25.

Over the last six months, the stock performance has varied, with an increase following a drop. The stock's price trend wasn't definitive when matched against its global counterparts from the same sector and industry (as depicted above). Within the past six months, its performance has trailed this peer group's by 29ppts and its growth accelerated by 29ppts in the past month. This is equally valid for peers from the same country and industry. Given the stock's valuation versus its peers, its total price movement is neither favourable nor unfavourable.

The company has reported very poor EBITDA margins compared to its global peers in recent years. EBITDA margin amounted to -62.3% in the last 12 months, a decline from 11.5% in FY23. 

Historically, BMBL has reported very poor net margins compared to its global peers. Specifically, in the last 12 months, this metric equalled -53.6%, down from -0.5% in FY23. 

Bumble Inc. reported a return on equity (RoE) of -46.0% in the last 12 months, down from -0.3% in FY23. The market consensus projects an RoE of 4.9% in FY24, again behind its peers. 

In the last 12 months, the return on capital employed (RoCE) declined to -19.5%, below the peers. The consensus estimate for FY24 for RoCE is -25.3%, again behind the peers. 

Another important profitability metric, return on assets (RoA), amounted to -18.4% in the last 12 months, a decrease from -0.1% in FY23. The market analysts predict that RoA will be 2.2% in FY24, again weaker than its peers. 

The ratio of return on invested capital (RoIC) to the weighted average cost of capital (WACC) has been -1.7 in the past several years. This ratio implies a fragile shareholder value creation. 

The institutional, legal, and compliance risks associated with the company's country are minimal. In combination with stringent business standards, shareholder rights are very highly protected.

BMBL boasts high trading liquidity. The average private investor can sell his common position in the stock almost immediately. Liquidity is usually quite stable and remains extremely favourable on the days with the lowest activity. The trading volume mostly stays the same even under highly turbulent market conditions. The stock has a small market capitalisation, which usually makes its trading liquidity erratic and unpredictable. 

No other major risks have been identified.

The risk of default is high. Among the negative credit factors, we point to bleak profitability, negligible return on capital, and inadequate interest coverage. We note low margin volatility and an favourable capital structure, among the positive credit factors. 

In highly turbulent market conditions, BMBL is exceptionally volatile. In other words, the stock will be among the worst-performers in times of extreme market volatility or shocking company news. Standalone, the worst-day losses (less than 1% of the time) will likely be critical. 

In normal market circumstances, BMBL is exceptionally volatile. Put differently, without outstanding market volatility or shocking company news, the stock's price will change quite unpredictably. The stock's losses on its worst days (less than 1-5% of the time) will range from critical to immense. 

From both historical and forecast perspectives, the stock is considerably underpriced compared to similar stocks. Specifically, the stock is 'cheap' on P/E, underpriced on P/FC. 

Bumble Inc.

$ 5.97

3

Bumble Inc.

$ 5.97

3

Risk factor

Profitability factor

Risk / Profitability

Risk factor

Profitability factor

$ 5.97

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