What Happened:
Shares of online dating app Bumble (NASDAQ:BMBL) jumped 14.9% in the morning session after the company reported first-quarter results. Bumble increased its number of buyers this quarter.
On the other hand, its revenue and adjusted EBITDA guidance for next quarter missed analysts' expectations and its revenue growth stalled. Looking to the full year, the company still thinks it can hit previously given guidance. Overall, this was a mixed quarter for Bumble.
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What is the market telling us:
Bumble's shares are quite volatile and over the last year have had 20 moves greater than 5%. But moves this big are very rare even for Bumble and that is indicating to us that this news had a significant impact on the market's perception of the business.
The biggest move we wrote about over the last year was 6 months ago, when the stock dropped 7.8% on the news that CEO and Founder Whitney Wolfe Herd announced she is stepping down from her role at the company. The move comes as a surprise, especially with the company reporting its Q3 earnings tomorrow. Herd will be replaced by Lidiane Jones, who previously served as CEO of Slack. Herd's departure serves as a cautionary flag for investors when considering that sentiment around the dating category has also been subdued for the past year. Saturation of the market is top of mind for investors as paid subscriber counts are slowing after getting a boost from the pandemic.
Bumble is down 21.1% since the beginning of the year, and at $11.44 per share it is trading 45% below its 52-week high of $20.81 from July 2023. Investors who bought $1,000 worth of Bumble's shares at the IPO in February 2021 would now be looking at an investment worth $162.78.
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