What Happened?

Shares of online dating app Bumble (NASDAQ:BMBL) fell 6.9% in the morning session after markets seemed to have caught "tariff/trade war fever" once again (Nasdaq down 1.9%, S&P 500 down 1.2%) amid broader geopolitical anxiety. The volatility was perhaps also related to uncertainty surrounding the Fed's rate decision to be announced later in the week. The consensus estimate was for the Fed to keep interest rates at the range of 4.25%-4.5%. 

This could be a bit of a letdown for the dovish camp, expecting some policy relief to help offset the growing market weakness amid the ongoing trade war, which some analysts considered to be bad for growth and corporate earnings.

The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Bumble? Access our full analysis report here, it’s free.

What The Market Is Telling Us

Bumble’s shares are very volatile and have had 21 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business. 

The previous big move we wrote about was 27 days ago when the stock dropped 28.1% on the news that 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 during the quarter. Still, this was a disappointing quarter.

Bumble is down 41.9% since the beginning of the year, and at $4.63 per share, it is trading 62.4% below its 52-week high of $12.30 from May 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 $65.83.

Today’s young investors likely haven’t read the timeless lessons in Gorilla Game: Picking Winners In High Technology because it was written more than 20 years ago when Microsoft and Apple were first establishing their supremacy. But if we apply the same principles, then enterprise software stocks leveraging their own generative AI capabilities may well be the Gorillas of the future. So, in that spirit, we are excited to present our Special Free Report on a profitable, fast-growing enterprise software stock that is already riding the automation wave and looking to catch the generative AI next.