Bumble Inc. (BMBL): A Bull Case Theory

We came across a bullish thesis on Bumble Inc. (BMBL) on Value Investing Subreddit Page by DeepValueInsights. In this article, we will summarize the bulls’ thesis on BMBL. Bumble Inc. (BMBL)'s share was trading at $4.30 as of April 21^st. BMBL’s trailing and forward P/E were 18.79 and 7.11 respectively according to Yahoo Finance.

Bumble’s current valuation appears deeply disconnected from its underlying fundamentals, creating a compelling opportunity for investors. The stock trades at just 5.1x EV/EBITDA and 0.5x book value—metrics that seem especially conservative for an app-based platform where goodwill and intangibles are natural components of enterprise value. Despite a net loss driven by write-offs, Bumble is free cash flow positive, generating $114 million annually, which implies a striking 25% free cash flow yield on its $450 million market cap. The company holds cash equivalent to roughly 50% of its market cap and returned $214 million to shareholders through buybacks in 2024, signaling strong capital discipline. While growth has decelerated and quarterly revenues have modestly declined, the core business remains solid, with continued top-line growth on an annual basis. Concerns around $600 million in debt maturing within two years—and the likelihood of refinancing at higher rates—are valid but manageable given Bumble’s cash flow strength. The market seems overly focused on short-term pressures, ignoring the long-term potential of a platform with strong brand equity, a sticky user base, and significant monetization opportunities. If sentiment shifts or the company executes on strategic improvements, Bumble’s stock could see meaningful upside from today’s discounted levels.

Bumble Inc. (BMBL) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 33 hedge fund portfolios held BMBL at the end of the fourth quarter which was 31 in the previous quarter. While we acknowledge the risk and potential of BMBL as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than BMBL but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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Disclosure: None. This article was originally published at Insider Monkey.