Bumble Inc (NASDAQ:BMBL) could well be on course to beat second quarter expectations, according to Bank of America analysts.
Analysts at the bank upgraded the online dating firm to a ‘buy’ in a note, highlighting a string of changes since former Slack boss Lidiane Jones took the helm at Bumble in November.
This includes plans to cut almost a third of its staff, which could result in a 3% jump in earnings margins, Bank of America said.
“Bumble has also recently launched several key products and initiatives which we think can accelerate users, payers [and] average revenue per paying user,” analysts added.
Options for women to make the first move on the app was among these, as well as the tweaks to the Bumble app, safety investment and a new ad campaign.
“If Bumble's initiatives outperform, it could drive results above second-quarter guidance which came in slightly below street expectations,” Bank of America noted.
Bumble had laid out expectations for revenue to sit between US$269 million and US$275 million, after coming in at US$242.9 million over the first quarter.
For every 1% of brand payer growth, or roughly 30,000 users, revenues should climb by 0.8%, Bank of America said, meaning beating guidance “shouldn't be a heavy lift”.
“We are more confident now that Bumble can meet or exceed street expectations,” the bank added, after doing so in the first quarter.
A US$14 share price target was set, marking a prospective rise of 22% on Friday’s close.