Bumble dives as revenue forecast cut triggers worries over turnaround

(Reuters) – Bumble shares slumped 35% in premarket trading after the women-centric dating app cut its annual revenue growth forecast, stoking concerns about its efforts to turn around the business.

The company now expects its full-year revenue to grow between 1% and 2%, compared with an earlier forecast for 8% to 11%. It also missed expectations for second-quarter revenue.

Bumble will slow down certain monetization efforts, such as the expansion of its Premium Plus subscription offering that was planned for the second half of the year.

The forecast reset raised concerns about uptake following the recent relaunch of Bumble’s eponymous app and a refresh of the Premium Plus offering as it faces sluggish user spending.

While the app relaunch improved engagement and the women’s experience, it did not have the desired impact on attracting new users and monetization, analysts at J.P. Morgan said, downgrading Bumble to “neutral” from “overweight”.

Turnaround efforts usually take time, they said.

Bumble’s total average revenue per paying user decreased to $21.37 in the second quarter, from $23.23 a year earlier.

The average rating of 23 brokerages covering the stock is “buy” and the median price target of $12.50 implies a 55% upside in the next 12 months.

Bumble’s price-to-earnings ratio, a key metric in valuing stocks, was 7.91 times, much lower than rival Match Group (NASDAQ:)’s multiple of 15.15.