Bumble (BMBL) saw its shares crash more than 35% in premarket trading Thursday after the company cut its annual revenue growth forecast, raising concerns among investors about the dating app operator's growth strategy.
For the second quarter, Bumble reported earnings per share (EPS) of $0.22, exceeding analyst expectations of $0.15. Revenue came in at $269 million, slightly below the consensus estimate of $273.18 million.
The total number of paying users increased to 4.1 million, up from 3.6 million a year ago.
The results have raised doubts about Bumble's growth strategies, including the introduction of a revamped Bumble app and new features like "opening moves," which lets women create a custom question that potential matches can respond to, facilitating the start of conversations.
Looking ahead, Bumble revised its annual revenue growth forecast to a range of 1% to 2%, down from the previous expectation of 8% to 11%.
For the third quarter, Bumble anticipates revenue between $269 million and $275 million, compared to the average analyst estimate of $296.1 million, according to LSEG data.
Following the earnings call, analysts at Stifel downgraded Bumble stock to Hold from Buy and cut its price target to $6.5 from $13.
“Though we believe the proposed changes make intuitive sense and, if properly executed, are likely to set the company up for a better chance at success, we believe the category-wide intense focus on providing a better experience for women will remain an overhang for investors as most are likely to view the differentiation across competing apps as dissipating.”
“As such, we expect the shares to remain depressed in the near-term, or until there is marked improvement,” they added.
Meanwhile, analysts at Bank of America reiterated a Buy rating on the stock but reduced estimates and price target from $14 to $12 due to “softer user trends.”