JPMorgan Upgrades Bumble On App Trajectory, Product Roadmap, BFF Feature

Investors have recently been focused on the slowdown in Bumble Inc’s BMBL app payer growth in the third quarter, missing the strong underlying momentum in monthly average used (MAUs), daily average users (DAUs) and user retention, according to J.P. Morgan, part of JPMorgan Chase & Co JPM.

The Bumble Analyst: Internet Equity Research Analyst Cory Carpenter upgraded the rating for Bumble from Neutral to Overweight, while keeping the price target unchanged at $55.

The Bumble Thesis: Management indicated that the slowdown in the Bumble app payer growth was due to temporary Google Play payment restrictions and expect growth to accelerate meaningfully in the fourth quarter, Carpenter said in the upgrade note.

“Further, we expect Bumble app net adds in 2022 to be > 2021 driven by product & monetization focus on the pre-match experience, lower-end tiers (i.e., college bundles), & consumables—which if correct suggests healthy upside potential to consensus net adds of 326k in 2022 (vs. 349k in 2021),” the analyst wrote.

“We are also more positive on BFF, where we think the product shift from swiping on friends to building communities around shared interests makes sense & has potential to more meaningfully address the inherent challenge of churn faced by dating apps & improve LTV,” he added. Bumble describes its BFF feature as a “simplified way to create meaningful friendships.”

BMBL Price Action: Shares of Bumble had risen by 10.63% to $36.78 at the time of publication Tuesday.

Related Link: Bumble Has Surpassed $1 Billion in Global Consumer Spend According to App Annie