After the Bumble dating service debuted on Thursday, CNBC’s Jim Cramer compared his business performance to his main rival, Match Group, and offered recommendations on their actions.
Bumble, which went public with a lot of fanfare to gather over 63% on its first day, includes in its umbrella the Badoo dating site in Europe. Match Group, which was derived from the IAC media holding company last summer, has a larger portfolio that includes Tinder, Hinge and OkCupid, among other connection services.
However, their business should serve different purposes for investors, Cramer said.
“They’re both great companies. I think they’ll have a great number in the second half, they’ll just play different roles in your portfolio,” he told Mad Money.
Bumble, which was launched in 2014 by Whitney Wolfe Herd, was priced at $ 43 before it began trading under the “BMBL” symbol. It had a market value of $ 13 billion at the close, with a share price of $ 70.31. Match Group ordered a $ 45.8 billion market cap at closing.
Bumble is the fastest producer of the two competitors, based on the figures in its S-1 file. In 2019, the company said total revenue was $ 488.9 million, up nearly 36% from $ 360.1 million in 2018. Regarding the 2020 pandemic year, Bumble reported Total revenue of $ 416.6 million in the first nine months ending Sept. 30, $ 40 million of which he said was generated between Jan. 1 and Jan. 28.
Compared to the same nine months in 2019, when total revenues reached $ 362.6 million, Bumble saw its business grow by 15% amid the pandemic.
Regarding Match Group, the company recorded total revenues for the whole year 2020 of 2.4 billion dollars, which increased by 17% compared to 2019. Its revenues increased by 19% in 2019 compared to 2018, he mentioned Cramer.
“If you’re a growth-oriented investor, Bumble is the way to go,” Cramer said. “Even after today’s incredible moment, it’s the top growth stock.”
Bumble has much less coverage than Match. In its prospectus, Bumble said it had 42 million monthly users in the third quarter and 2.4 million paying users as of September last year.
Match reported that it has almost 11 million subscribers on average in the fourth quarter of 2020, representing an improvement of 12% year on year.
Bumble and Match executives hope to continue expanding their online dating business with former platonic matchmaking construction products and networking services.
A key difference between businesses is that Match is profitable, while Bumble is still a money-losing business with improving margins, Cramer said.
“If you have a more cautious approach to the market and still want an online stock of meetings, Match is the way to go,” Cramer said.
The stock’s shares, which closed at $ 172.13 on Thursday, traded 16 times this year’s sales estimates, a valuation that Cramer said is far too cheap for a 17 percent increase.
Based on FactSet estimates, Match is expected to generate sales of $ 2.8 billion this year and $ 3.31 billion in 2022.
“People pay [for Match] because the numbers are expected to explode once we reopen, “Cramer said.
Bumble sells 17 times sales, he added. It is estimated that the company will have sales for the whole year 2020 of $ 580 million, $ 723 million this year and $ 897 million in 2022, according to FactSet figures.
“In other words, it looks very similar based on the selling price, even if Bumble grows twice as fast as Match,” he said.