Bumble Q1 preview: 3 things to watch

• Bumble Inc (NASDAQ: BMBL) share price is down 24.5% so far in 2021
• Despite the stock’s bearishness, analysts envision a 28% upside
• The parent company of dating apps Bumble and Badoo is due to release its first quarter earnings for 2021 this week
• Bumble posted a ‘significant increase’ in revenue in the previous quarter
• Buy and sell Bumble shares with an IG account

Bumble Inc. (NASDAQ: BMBL), the parent company of dating apps Bumble and Badoo, is scheduled to report financial results for the first quarter ending 31 March 2021 after the close of market on Wednesday (12 May 2021).

Below are three things to consider ahead of the earnings report.

1. First quarter sales estimate: US$163 million to US$165 million

Bumble anticipates that revenue for the first quarter of 2021 will be in the range of US$163 to US$165 million, with adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) to come in between US$41 and US$42 million.

Wall Street estimates for Q1 2021 adjusted earnings per share stand at a loss of US$0.03 as of Monday (10 May).

For the full 2021 financial year, the company has forecasted for revenue to be in the range of US$716 million to US$726 million. Meanwhile, it predicts that adjusted EBITDA will come in between US$173 million and US$178 million.

Analysts’ estimates for Bumble’s 2021 revenue range from US$718.7 million to US$730.9 million, with a consensus estimate of US$723.9 million.

2. Analysts see 28% upside on Bumble stock

The stock is down 24.5% year to date.

Analysts have given a consensus rating of ‘buy’ and 12-month price target of US$67.93, based on the latest MarketBeat data.

The price target represents a 27.9% upside from the stock’s last closing price of US$53.11 on Friday (07 May 2021).

BTIG analyst Jake Fuller rated Bumble a ‘buy’ with a US$77 price target last month.

He wrote that the online dating category looks appealing with a strong secular growth and margin profile, thanks to near-term re-opening tailwinds as in-person interaction becomes ‘more viable’.

Meanwhile, Evercore ISI analyst Mark Mahaney initiated coverage of Bumble with an ‘in line’ rating and US$64 price target. The analyst sees Bumble as a leading player in the online dating market with secular tailwinds, but also notes a balanced risk/reward at current shared levels.

3. ‘Significant increase’ in fourth quarter revenue

Bumble’s revenue increased 31.1% year-on-year to US$165.6 million in the fourth quarter of 2020, compared to US$126.3 million.

‘Our significant increase in revenue and paying users is a direct result of our team’s dedication and remarkable agility during a challenging pandemic,’ said Whitney Wolfe Herd, Founder and CEO of Bumble.

The Bumble app saw Q4 2020 revenue increase 46.6% from Q4 2019 to US$105.8 million, while Badoo app and other revenue increased 10.5% to US$59.8 million.

Total Paying Users increased 32.5% to 2.7 million for the quarter, compared to two million.

Total ARPPU (average revenue per paying user) was US$20.02, compared to US$19.99.

Net loss was US$26.1 million in Q4 2020, as compared to net earnings of US$17.2 million in Q4 2019.

Adjusted EBITDA was US$44.1 million, or 26.6% of revenue, compared to US$21.9 million a year prior, or 17.3% of revenue.

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