Goldman Sachs Analyst Maintains Buy Rating on BMBL Stock Amid Strategic Reorganization and Product Expansion Plans

Goldman Sachs analyst Eric Sheridan maintains a Buy rating for Bumble's stock, citing the company's strategic reorganization and product expansion plans. Sheridan believes Bumble's focus on user categories and new product releases will enhance operational efficiency and lead to growth. Despite uncertainty around user growth trends, Sheridan sees potential in Bumble's ability to improve membership quality and achieve revenue growth and margin expansion.

Bumble Inc. reported its second-quarter earnings for 2025, revealing a significant miss in earnings per share (EPS) compared to forecasts, while revenue slightly surpassed expectations. The company reported an EPS of -$2.45, a stark contrast to the forecasted $0.34, resulting in an EPS surprise of -822.5% [1]. Despite this, revenue came in at $248 million, slightly above the forecast of $244.17 million. Following the earnings announcement, Bumble’s stock remained stable in after-hours trading, closing at $7.65 with a slight increase of 1.32%.

Goldman Sachs analyst Eric Sheridan maintains a Buy rating for Bumble's stock, citing the company's strategic reorganization and product expansion plans. Sheridan believes Bumble's focus on user categories and new product releases will enhance operational efficiency and lead to growth. Despite uncertainty around user growth trends, Sheridan sees potential in Bumble's ability to improve membership quality and achieve revenue growth and margin expansion [2].

Bumble's overall performance in Q2 2025 was mixed. The company faced a substantial EPS miss, largely due to unforeseen expenses or operational challenges. However, its revenue performance was slightly better than anticipated, indicating some positive underlying business trends. The company continues to lead in the friendship app market and maintains strong brand recognition, particularly among Gen Z and millennial women.

Financial Highlights
- Revenue: $248 million, up from the forecasted $244.17 million
- EPS: -$2.45, significantly below the forecasted $0.34
- Adjusted EBITDA: $95 million, representing 38% of revenue
- Cash flow: $71 million, with $262 million in cash and cash equivalents at quarter’s end

Earnings vs. Forecast
Bumble’s actual EPS of -$2.45 was a significant miss compared to the forecast of $0.34, marking an EPS surprise of -822.5%. This deviation highlights potential challenges Bumble faced during the quarter. Despite the EPS miss, revenue of $248 million slightly exceeded expectations by 1.65%, driven by a $2 million foreign exchange tailwind.

Market Reaction
Following the earnings release, Bumble’s stock remained stable in after-hours trading, closing at $7.65, a 1.32% increase from its previous close. The stock’s stability suggests that investors may have already priced in potential challenges or are optimistic about Bumble’s strategic initiatives and future prospects.

Outlook & Guidance
For the third quarter of 2025, Bumble projects revenue between $240 million and $248 million, with Bumble app revenue forecasted at $194 million to $200 million. The company expects an Adjusted EBITDA of $79 million to $84 million. Bumble continues to invest in product enhancements, AI technology, and trust and safety measures, anticipating short-term user attrition but long-term quality improvements.

Executive Commentary
CEO Whitney Wolferd emphasized the company’s forward-looking strategy, stating, "We are not building for where the world was or is. We are building for where it’s going." She also highlighted the importance of quality connections, saying, "Fewer better is always going to win when it comes to connection and relationships."

Risks and Challenges
EPS miss indicates potential operational or financial challenges. User attrition could impact short-term revenue. Competitive pressures in the dating app market. Economic uncertainties affecting consumer spending. Execution risks in AI and product innovation initiatives.

References:
[1] https://www.investing.com/news/transcripts/earnings-call-transcript-bumble-q2-2025-misses-eps-forecast-stock-stable-93CH-4175179
[2] Goldman Sachs Analyst Eric Sheridan's Report on Bumble Inc.