What Happened?

Shares of online dating app Bumble (NASDAQ:BMBL) fell 28.1% in the afternoon session after the company reported weak fourth-quarter 2024 results: Its revenue missed Wall Street's estimates along with its revenue and EBITDA guidance for the next quarter. The Bumble app, its core business, saw revenue decline by 3.8%, while the Badoo app and other revenue fell 6.8%. This drop was partly due to foreign currency headwinds and lower average revenue per paying user. On the other hand, it was good to see Bumble narrowly meet analysts' EBITDA expectations this quarter. Still, this was a disappointing quarter.

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What The Market Is Telling Us

Bumble’s shares are quite volatile and have had 18 moves greater than 5% over the last year. But moves this big are rare even for Bumble and indicate this news significantly impacted the market’s perception of the business. 

The biggest move we wrote about over the last year was 7 months ago when the stock dropped 40.8% on the news that the company reported weak second-quarter earnings results. Its revenue missed Wall Street's estimates, and it severely downgraded its full-year revenue guidance from 9.5% year-on-year growth to 1.5% growth. It also lowered the guidance for full year Bumble App payer net addition to 275,000 to 285,000 (vs. previous guidance of 350,000 to 400,000). The guidance implied negative net adds in Q4, which is not a good sign. Overall, this was a weaker quarter.

Bumble is down 25.7% since the beginning of the year, and at $5.91 per share, it is trading 55.5% below its 52-week high of $13.28 from February 2024. Investors who bought $1,000 worth of Bumble’s shares at the IPO in February 2021 would now be looking at an investment worth $84.20.

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