Bumble Shares Join Tech Rally After Gen Z Worries Spurred Plunge | Tech News

Bumble Shares Join Tech Rally After Gen Z Worries Spurred Plunge

Bumble Inc. joined a broader rally for tech stocks Thursday fueled by softer-than-expected US inflation data, erasing a premarket plunge following its results.

By:BLOOMBERG
| Updated on: Nov 11 2022, 17:37 IST
Bumble
Bumble joins tech rally after Gen Z worries spurred plunge. (REUTERS)

Bumble Inc. joined a broader rally for tech stocks Thursday fueled by softer-than-expected US inflation data, erasing a premarket plunge following its results.

The shares climbed as much as 14%, after earlier sliding on concern that younger users aren't renewing their subscriptions on the company's main dating app.

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Stock gains notwithstanding, analysts were cautious on Bumble after it reported worse-than-forecast revenue in the fourth quarter. The update triggered price-target cuts from brokers including Deutsche Bank AG, Goldman Sachs Group Inc. and Morgan Stanley. Bumble had slumped as much as 15% in premarket trading, before rallying on the main market.

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“Bumble brand is seeing lower renewal rates on subscriptions, particularly among Gen Z users,” Morgan Stanley analysts, led by Lauren Schenk, wrote in a note, lowering their price target on the stock to $19, below Wednesday's close of $20.93.

During a post-results conference call, Chief Executive Officer and founder Whitney Wolfe Herd said the economic slowdown was affecting segments of Bumble's user base that face “greater pressure” on disposable income.

The shares were down 38% this year prior to the report as investors fled the stock as well as Tinder and Hinge parent Match Group Inc. Alongside a weakening economy curbing subscription revenue, dollar strength is cutting into international sales.

Still, no analyst has a sell rating on the stock. Morgan Stanley is among seven with a hold or equivalent recommendation, while 10 have Bumble as a buy.

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First Published Date: 11 Nov, 17:06 IST
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