Thursday, Morgan Stanley assumed coverage on shares of Bumble Inc. (NASDAQ:BMBL), the online dating company, setting an Equalweight rating and a price target of $13.00. The investment firm recognized Bumble as the second major global online dating platform amidst its efforts to expand internationally.
Bumble's revenue growth has been slowing down in the United States, prompting the company to focus on innovation as a means to potentially boost user and revenue growth, especially in its existing markets. Morgan Stanley anticipates that the relaunch of the Bumble brand in the second quarter could serve as a significant catalyst for the company, possibly leading to a turning point in its performance.
The analyst from Morgan Stanley also noted that Bumble's EBITDA margin is expected to remain limited in the low 30% range over the long term. This is in contrast to the firm's projections for Match Group (NASDAQ:MTCH), which is anticipated to achieve an EBITDA margin of about 35-40%.
Bumble's strategy involves a combination of international expansion and a push for innovation to reinvigorate growth. The company has been working on these initiatives as it encounters a more challenging growth environment in the U.S. market.
The price target of $13.00 set by Morgan Stanley reflects their assessment of Bumble's current financial outlook and market position. The Equalweight rating suggests that the firm views the stock as fairly valued at its current price, implying that investors should expect performance in line with the broader equity market.
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