Analysts unanimously missed the plunge in shares of Match Group Inc. and Bumble Inc. this year, and still don’t have a single sell rating on the online-dating companies. The difference is, now they have a much better chance of being proven right in their optimism.
The setup now is favorable because so much of the bad news is priced in and there are early signs that businesses is stabilizing. Match, the owner of Tinder and OkCupid, last week topped quarterly revenue estimates and pledged to control costs. Bumble could do the same when it reports on Wednesday but will have a higher bar to surpass given the growth expectations embedded in the stock’s price, said Angelo Zino of CFRA Research.
While investors have punished the shares, analysts don’t have a single sell rating on the duo, and nor did they at the start of the year. Match has 16 buys and 5 holds, while Bumble has 10 buys and 7 holds, according to Bloomberg data. Bumble has fared relatively better than its larger rival because Match is dealing with company-specific issues. Its Tinder unit is dealing with issues including new brand campaigns, a search for a new CEO and a “new product roadmap that includes women’s experience, Gen Z-targeted product initiatives, virtual goods & coins,” said Shweta Khajuria, an analyst at Evercore ISI.