After the dating service Bumble made its market debut on Thursday, Jim Cramer of CNBC compared his commercial performance to that of his main rival, the Match Group, and offered his recommendations on his actions.
Bumble, which went public with much fanfare to gather more than 63% on its first day, includes the European dating site Badoo in its umbrella. The Match Group, which was born last summer by the media holding company IAC, has a larger portfolio that includes Tinder, Hinge and OkCupid, among other connection services.
Their businesses, however, must serve different purposes for investors, Cramer said.
“Both are big companies. I think they will have tremendous numbers in the second half, they will just fill different roles in their portfolio, ”he said in“ Mad Money ”.
Bumble, which was launched in 2014 by Whitney Wolfe Herd, was priced at $ 43 before it started trading under the “BMBL” symbol. It had a market value of $ 13 billion at the close, with a share price of $ 70.31. The Match Group commanded a market capitalization of $ 45.8 billion at the close.
Bumble is the fastest producer of the two competitors, based on the numbers in its S-1 file. In 2019, the company said total revenue was $ 488.9 million, an increase of almost 36% from $ 360.1 million in 2018. As for the 2020 pandemic year, Bumble reported total revenue of $ 416 , 6 million during the first nine months ending September 30, of $ 40 million of which is said to have been generated between January 1 and January 28.
Compared to the same nine months of 2019, when total revenue reached $ 362.6 million, Bumble saw its business grow 15% amid the pandemic.
As for the Match Group, the company recorded total revenues for the year 2020 of $ 2.4 billion, an increase of 17% compared to 2019. Its revenues grew 19% in 2019 compared to 2018, noted Cramer.
“If you are a growth-oriented investor, Bumble is the way to go,” said Cramer. “Even after today’s incredible race, it is the top growth stock.”
Bumble has a much shorter range than Match. In its prospectus, Bumble said it had 42 million average monthly users in the third quarter and 2.4 million paying users as of September last year.
Match reported having 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 employees building products for Platonic dating and networking services.
The main difference between the companies is that Match is profitable, while Bumble is still a company that loses money with margins that are improving, said Cramer.
“If you take a more cautious approach to the market and still want an online dating action, Match is the way to go,” said Cramer.
Match shares, which closed at a record $ 172.13 on Thursday, are trading at 16 times this year’s sales estimates, an assessment that Cramer said was too cheap for a 17% growth company .
Based on FactSet estimates, Match is expected to produce sales of $ 2.8 billion this year and $ 3.31 billion in 2022.
“People are paying [for Match] because they expect the numbers to explode as soon as we reopen, “said Cramer.
Bumble is selling 17 times the sales, he added. The company’s forecast is to register sales of US $ 580 million in 2020, US $ 723 million in the current year and US $ 897 million in 2022, according to FactSet figures.
“In other words, they look very similar on a sales price basis, although Bumble is growing twice as fast as Match,” he said.