Wells Fargo downgraded Bumble (NASDAQ:BMBL) to “Equal Weight” from a previous investment rating of “Overweight,” citing that buzz around the dating app platform’s April relaunch drove a “bump” in trends but barely any benefits were observed from it.
The bank believes reacceleration is “likely more challenging” in the second half of the year and hence trimmed its Q3 and Q4 estimates for Bumble App net adds to 120k and 80k, from 150k and 100k previously. It expects Bumble’s revenue to reduce by 1% and 2% and its EBITDA by 3% and 4% for the third and fourth quarters, respectively.
“In our view, another estimate reset is likely needed, and investors will have to recalibrate reacceleration timing expectations to 2025. Tinder is still struggling w/ top-of-funnel challenges, ~18 months after initially highlighting challenges vs. ~3 months for BMBL. As such, we believe attractive valuation no longer merits OW rating,” Wells Fargo analysts wrote in a July 8 note.
The bank set a new price target of $10 for Bumble (BMBL), down from $15, implying 6x 2025E EBITDA of $377M.
Bumble shares have lost more than a third of their value so far this year.