JP Morgan downgrades Bumble at it sees further revenue pressure

Investing.com -- JP Morgan downgraded Bumble (NASDAQ:BMBL) Inc to Underweight from Neutral, citing expectations for accelerating revenue and user declines, and maintained its $5 price target, which implies over 10% downside from current levels.

Bumble shares have surged more than 50% since the company’s restructuring update but argued the rally was driven by profit upgrades tied to cost cuts rather than sustainable growth. “We struggle to justify raising our price target given our expectation for revenue and payer declines to accelerate, regardless of the macro environment,” JPMorgan wrote, amid softening U.S. app download trends.

JP Morgan expects 2025 revenue to fall 12% year-over-year and Bumble app net adds to decline by 250,000, with adjusted EBITDA down 9%. While margins improved in Q1 due to reduced marketing and operating expenses, the firm expects those gains to moderate in the second half as brand spending resumes.

The broader online dating category remains challenged, particularly with Gen Z engagement, and the firm noted that rival Tinder, further along in its turnaround, is still reporting revenue declines. JP Morgan added that Bumble’s valuation, while low at around 7x 2025 free cash flow, is not compelling relative to peers with stronger growth prospects.

While acknowledging upside risks such as further cost cuts, potential M&A, or app store fee relief, JP Morgan believes a return to growth is unlikely before 2027. It sees Bumble trading at a discount to sector leader Match Group (NASDAQ:MTCH) until revenue trends show sustained improvement.

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