Dating apps are not doing well as growth slows after booming during the Covid-19 pandemic. This view is confirmed by the performance of dating app stocks in the United States.
Match Group (NASDAQ: MATCH) stock price was trading at $38 on Monday, down by almost 80% from its highest level in 2022. Its market cap has plunged from almost $50 billion in 2021 to less than $10 billion today.
It is not alone. Bumble (NASDAQ: BMBL) stock, which peaked at $84 in 2021, has crashed to less than $15. Like Match Group, its total market cap has fallen from almost $15 billion to $2.65 billion. Grinder (NYSE: GRND) stock price has crashed from a record high of $71 to $8.78, erasing over $7 billion in value.
Bumble vs Match Group vs Grindr stocks
Dating app companies are facing numerous challenges. The biggest one is that user growth in their ecosystems has slowed down dramatically after peaking during the pandemic. Data by SensorTower shows that dating app downloads has crashed to the lowest level in years.
The other challenge is that competition has increased substantially in the past few years. Data by SimilarWeb shows that the biggest players in the industry are Tinder,, Hinge, Bumble, Badoo, Feeld, and OkCupid. Hinge and Tinder are owned by Match Group.This means that growth in the industry will be limited.
The most recent results shows that user and premium growth is slowing. Grindr said that its monthly active users rose by just 8% from a year earlier. In the past, the company was constantly seeing double-digit growth.
Match Group’s users are also not growing as fast. In the third quarter, the company said that its new users in the US dropped by 6%. Bumble users rose by 25% in the same period, making it one of the fastest-growing companies in the industry.
With growth slowing, Match Group, Grindr, and Bumble have all focused on price increases. Tinder recently launched a new super-premium feature costing $499 per month. It is unclear whether the service will see meaningful users.
Bumble and Grindr have also hiked prices in the past few years. They have also introduced some lower tiers to cater to cost-sensitive users.
The dating app industry is here to stay because of the constant need for companionship around the world. However, the industry is also entering a new normal, of low user growth and potentially more profitability.
This explains why Elliot Management has bought a big $1 billion stake in Match Group. According to WSJ, he will discuss with the management how to boost profitability and its stock price. It also explains why some of these stocks have risen in the past few months. Grindr is up by over 70% in the past 12 months.
In all, it is unlikely that Match Group, Grindr, and Bumble will recover to their all-time highs now that their growth has fallen. However, modest gains cannot be ruled out in 2023 as inflation falls and consumer confidence bounces back.
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