Best Dating App Stock: Which Is Better?

Match and Bumble take disparate approaches to helping people connect and form romantic relationships. Match.com, as the app is commonly known, is owned by Match Group, Inc., which also owns 45 other dating services, including OkCupid, Tinder, and PlentyOfFish.

Bumble was created by Whitney Wolfe Herd, an early executive at Tinder. She left Tinder after colleagues subjected her to sexual discrimination and harassment. She settled out of court for $1 million.

Then in a twist of fate that surely hurt Match Group more than the million dollar payout, she built Bumble almost immediately after leaving Tinder. One of the app’s primary features lets women contact men, but does not let men contact women (this feature only applies to heterosexual relationships).

Bumble also runs a service called BFF that helps members find platonic friends in their areas. It also has a Bumble Bizz service that helps people find career opportunities.

As an investor, which of two makes for the best dating app stock to buy now? 

Can 42 Million Monthly Users Be Wrong?

The Bumble app has about 42 million monthly users, making it second only to Tinder. Bumble, however, competes against Tinder, Match, and similar apps in a strategic way. Wolfe considers Bumble a “feminist dating app” that makes women feel safer connecting with people they find attractive. The app also has a long list of “forbidden material” chosen to encourage safe conversation between members.

Aside from Bumble’s unique approach to connecting people, it offers an affordable investment opportunity. When the company went public in March 2021, shares debuted at around $75. Since then, share prices have fallen, although they have never dropped below the $40 line.

At first glance, some investors will shy away from Bumble because of its downward trajectory. Perhaps their prudence will help them avoid a poor investment decision. Buying shares now could mean that you purchase stock at a discounted rate. The financials tell the story about whether BMBL share price is a falling knife you don’t want to catch or a steal at today’s prices.

Bumble Growth Remains Steady

The first quarter financials reported by Bumble show steady growth. The company’s revenue grew to $171 million. Revenue from the Bumble app increased to $113. Importantly, the percentage of paying users increase by 30 percent to 2.8 million people.

It’s also critical to note that the average Bumble app revenue per user increased from $24.84 during the first three months of 2020 to $27.75 during the first three months of 2021. When you consider revenue from other apps and services, the amount of money spent by the average Bumble customer grew from $17.73 to $19.99 during the same time frame.

The “Feminist App” Is Exploding In Market Cap

Bumble’s valuation has increased significantly over the last few years. In 2017, experts determine that the company had a valuation of about $1 billion. The following year (2018), the value increased to $1.5 billion. In 2019, the valuation doubled to $3 billion.

The biggest surprise came in 2020 when Bumble’s valuation skyrocketed to $8 billion.

Global Vision Makes Match Enticing

Since Match owns so many brands, you should expect its valuation is commensurate with its diverse revenue streams.

Bumble is increasingly broadening its revenue streams but remains much more of a one-trick pony than the Match Group. With Bumble, you bet that one app – although a diverse one – will succeed.

With Match, you get some protection when one app doesn’t meet expectations. Tinder is its golden goose but it has a vast array of other digital properties to supplement revenues.

Also, Match has spent the last couple of years exploring international markets, so it has plenty of room for growth.

Fees Per Member Less Internationally

Potential lawsuits are a bit concern for Match investors. With millions of people using Match-owned apps to connect with each other, some of those users will have truly terrible experiences. Match must stay ahead of the evolving legal landscape, or it could be held responsible for putting users in dangerous situations.

There’s also the possibility that Match wants to grow too quickly. Expanding into other countries might grow the company’s user base, but it also puts a lot of financial stress on the organization while it waits for those expansions to become profitable.

The membership fees Match earns in the U.S. are not rivaled elsewhere. Indeed this is an issue Bumble has already faced with its international app, Badoo, which earns much less per user than its namesake app.

Match Has A Rich Asset Base

As of 2019, Match had $2.42 billion in assets, a $2.05 billion revenue, $534 million in net income, and $319 million in total equity. In other words, the company has plenty of resources that it can risk without undermining its growth plans.

Even if Match loses some short-term money growing into other areas, it can stay afloat until growth generates a long-term revenue increase.

Best Dating App Stock To Buy: Conclusion

Which is the top dating app stock to invest in? That probably depends on what you expect from your investment.

Match share values have grown quickly over the last year. Bumble stock hasn’t had enough time to show how well it will perform. It’s possible that Match has reached market saturation levels. Bumble, however, has ample opportunities ahead of it and is expanding to platonic and even business networking solutions.

If you want a lower risk investment, Match fits the bill because of its diversification across so many apps and globally. Bumble is the higher risk and potentially higher reward opportunity for more aggressive investors seeking higher returns.

---

The author has no position in any of the stocks mentioned. Financhill has a disclosure policy. This post may contain affiliate links or links from our sponsors.