Bumble shares surge as investors swipe right on AI-powered reboot
The Bumble Inc. (BMBL) app is shown on an Apple iPhone in this photo illustration February 11, 2021. REUTERS/Mike Blake/Illustration
March 12 : Bumble shares jumped more than 40 per cent in early trading on Thursday after the company posted upbeat fourth-quarter revenue and unveiled an AI‑driven overhaul of its apps to lure back younger users.
The rebound comes after years of losses and battered investor confidence, with the stock losing half of its value last year as growth in the online dating market slowed amid stiff competition.
CEO Whitney Wolfe Herd is betting that a revamped product could reinvigorate growth and appeal to younger users who complain of swiping fatigue.
The company is preparing to launch Bumble 2.0 that uses artificial intelligence to enhance quick photo swipes with a scrollable profile of short chapters that outline a user's interests, lifestyle and personality. Herd also said that Bumble could experiment with a "no‑swipe" experience in some markets.
Analysts, however, struck a cautious note on the degree to which the redesign would turn around Bumble's fortunes. They are watching for signs of "meaningful innovation" in an industry that has seen little change since the swipe‑based design became standard.
The dating category has had "multiple false starts", analysts at Jefferies said. "While early signs of stabilization are encouraging, we need to see a more sustained improvement to turn constructive."
Dating applications like Match Group's Hinge are also rolling out AI‑powered tools aimed at improving user experience to win back younger users as dating apps race to adapt to shifting preferences.
Bumble reported fourth-quarter revenue of $224.2 million, topping analysts' estimates of $221.3 million, while average revenue per paying user jumped 7.9 per cent to $22.20. Its performance‑marketing spend dropped more than 80 per cent year‑on‑year.
Raymond James analysts said near‑term momentum for Bumble still depends on stabilizing paid users and proving that the post‑reset ecosystem can grow without heavy reliance on paid acquisition.
The stock trades at 3.55 times its projected earnings for the next 12 months, compared with 11.05 times for the Match Group.
