Not a match: Bumble has lost 92% of its value in 4 years
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- Bumble plunged almost 30% on Wednesday amid a disappointing outlook in its latest earnings report.
- The dating app's stock has declined steadily since peaking shortly after its 2021 IPO.
- Investors are discouraged by dating app user fatigue and less user spending.
Bumble stock plummeted Wednesday after shareholders were dismayed by the company's forward guidance, with the stock extending a brutal decline that's wiped out more than 90% of its market value in recent years.
Though the dating app company delivered a fourth-quarter revenue beat of $261.6 million, any positive reactions among investors were overshadowed by a weaker-than-expected outlook.
Bumble forecast sales to reach between $242 million to $248 million in the first quarter, short of consensus expectations of $256.9 million. The weaker guidance is the result of what Bumble says is a temporary drop in paying users amid the company's efforts aimed at a brand refresh.
Shares of the dating app were down 28% at midday ET on Wednesday, trading at around $5.83.
Wednesday's drop extends the stock's long, steady decline. It soared initially after the company went public in early 2021, hitting an all-time closing high of $78.89 on February 16, 2021 — and has fallen over 92% since.
Bumble's difficulties reflect evolving feelings about dating apps as habits shift and people report app fatigue. Shares of rival firm Match Group, whose portfolio includes Tinder and Hinge, have dropped about 79% since peaking in April 2021.
Dating apps have become an increasingly harder pitch to shareholders as paying users have either falled off, or, in Bumble's case, decide they want to pay less for the service. With user fatigue on the rise, dating app companies have scrambled to stay relevant by pouring money into creating a more unique user experience.
Dwindling user retention since the pandemic has been the core challenge underlying Bumble's decline since 2021, translating into revenue letdowns. In August, the stock fell close to 30% on another disappointing outlook.
In the latest earnings commentary, founder Whitney Wolf Herd explained that the company overhaul currently taking place will result in strength down the road.
"The team is poised to ramp innovation this year that will align with key customer needs. The work we're undertaking will take some time to reaccelerate growth in Bumble app paying users and revenue, but we're confident that all of these improvements will put Bumble on a path to renewed strength in the years ahead," she said.