It’s time for investors give shares of Bumble a little more love, according to KeyBanc Capital Markets. Analyst Justin Patterson upgraded shares of the mobile dating company to overweight from a sector weight rating, citing increasing conviction in Bumble’s ability to capitalize on online dating trends. Shares gained about 3% before the bell. “When coupled with product initiatives … international ramps, and moderating FX headwinds, we are increasingly confident the core Bumble app can sustain 20%+ annual revenue growth,” he said in a Monday note. Patterson established a $27 price target on the stock, implying nearly 35% upside from Monday’s close. The stock shed 38% in 2022. He also views Bumble’s valuation as attractive relative to peers like Match. It trades at 12.4 times 2024 enterprise value to EBITDA, with opportunities for high-teens to 20% margin growth. As demand for online dating holds up, Patterson expects the company to benefit from further expansion in international markets, moderating foreign exchange headwinds and growth within its compliments offering. “We believe Bumble is benefiting from a secular trend toward online dating globally, and a search for more meaningful relationships,” Patterson said. “By focusing deeply on product, brand, and trust and safety, we believe Bumble has created a business that can garner a meaningful user base across geographies.” — CNBC’s Michael Bloom contributed reporting
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