Dating is back. With lockdown restrictions lifted and so many people vaccinated or protected by natural immunity post infection, it doesn’t take a genius to figure this out, suggests Michael Brush, editor of Brush Up on Stocks.
Bumble (BMBL) is a play on this theme. Bumble is a dating app with an interesting twist. Only women can initiate contact after parties both indicate an interest by swiping right on profiles.
Premium features on the company’s Bumble and Badoo apps allow users to see who swiped right on them, post more personal information and spotlight profiles.
Online dating apps are now the most common way for new couples to meet in the U.S., according to a study published in Proceedings of the National Academy of Sciences of the United States of America (PNAS).
Both factors (exit from lockdowns and increasing popularity of dating apps) explain why first quarter revenue growth here was strong at 43%, and total paid users increased 30% to 2.8 million. ARPPU, the golden benchmark of consumer-facing tech companies (average revenue per user), jumped to $20 from $17.73. The company flipped to posting solid earnings compared to losses a year ago.
“Our first quarter results reflect significant growth in paying users as well as improved monetization, positioning us to raise full year 2021 guidance,” said CFO Anu Subramanian. The company expects sequential revenue growth in the second quarter to be as high as 4%. That may be conservative, since it offered that guidance in the earlier days of governments lifting lockdown restrictions.
Besides gaining new members, Bumble is increasing revenue by adding new “badges” that people can purchase to basically virtue signal, offering advance filters, offering in app purchases of products, and adding new categories like friend discovery.
Bumble, launched in 2014, is popular in the U.S., the UK, Australia and Canada. The company’s Badoo app, launched in 2006, is popular in in Europe and Latin America.
Tactics: Consider buying now as an ongoing reopening play and a play on the popularity of online dating. Insiders including the CEO bought as high as $76 to $79 back in February and you can get the stock a lot cheaper now. This company is founder run, which in my book is a real plus for investors, especially in tech.
