With Valentine’s Day quickly approaching, investors should take a moment to reflect on how technology has transformed the dating world over the past few years and how much potential the dating services market has going forward. The truth is that more and more people are using these applications to find their partners, especially thanks to the pandemic. Revenue from the dating services market is projected to reach $7.7 billion in 2021 and grow at an annual rate of 8.6% annually by the year 2024. Naturally, there will be several companies that benefit from this growth, which could present great long-term investing opportunities.
When you consider how online dating applications can continue advancing thanks to technologies like artificial intelligence and machine learning, it’s not farfetched to anticipate people using these applications as the number one way to find love in the future. There’s a lot that is attractive about investing in dating app stocks at this time, which is why we’ve put together a list of 3 dating app stocks for investors to love.
The newest dating app stock that investors should have their eye on is Bumble. The company went publicearlier this week and rallied more than 63% on its first day of trading. Bumble is unique in that its dating application is built to empower women by requiring them to initiate communication with their matches first. The Bumble portfolio also consists of friendship and networking applications in addition to the dating app, which rounds out a diverse list of growth opportunities for the company. The company also owns and operates Badoo, which is a dating app that is popular in Europe and Latin America.
The Bumble application currently has around 12 million monthly active users, including an average of 2.4 million average paying users at the end of September 2020. According to the company’s prospectus, Bumble generated revenue of $416.6 million in the first nine months of 2020, which represented a year-over-year increase of about 13%. Investors should probably wait for price discovery before adding shares since the company doesn’t have much trading history, but it’s safe to say that this is a dating app stock that could be a keeper.
If you are looking for a company with the #1 downloaded dating app on the planet, look no further than Match Group. The company’s Tinder application is growing at an astounding pace and delivered $1.4 billion in revenue for the company in FY 2020, which represents an increase of 18% year-over-year. Along with Tinder, Match Group is a solid pick thanks to its large portfolio of brands including well-known names like Match, OkCupid, Hinge, and PlentyOfFish. Match Group is essentially the global leader in dating apps, and its products are available in over 40 languages to users all over the world.
The company recently reported impressive Q4 earnings that saw total revenue grow by 19% year-over-year to reach $651 million. Investors should also be impressed with the company’s Adjusted EBITDA growth for FY 2020, which increased by 15% year-over-year to $897 million. The bottom line here is that investors have been loving Match Group stock for a while now, and it’s worth a look if you are interested in adding an established and profitable dating app company to your investment plans.
Finally, Momo is a nice option as it is one of the biggest dating applications in China and a stock that could end up being a bargain at its current price. The company operates a mobile social entertainment platform called Momo that is mainly used for dating and also owns Tantan, a dating app that is geared toward younger users. Both of the apps rank among the most widely used in China and Tantan is often referred to as the “Tinder of China”.
Momo stock sold off hard during the onset of the pandemic and hasn’t quite recovered yet, meaning that it offers decent upside at this time. However, the company recently reported a year-over-year decrease in Q3 net revenues of 15.4% to $554.8 million. Monthly active users are also on the decline, and the company’s management expects another drop in Q4 net revenue due to the impacts of the pandemic. With that said, the stock is up 46% year-to-date and seems to be getting back in favor with investors. Consider this Chinese dating app stock a high-risk option with upside.
Before you consider Bumble, you'll want to hear this.
MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and Bumble wasn't on the list.
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