After Bumble dating service made its market debut on Thursday, CNBC’s Jim Cramer compared his business performance to his main rival, Match Group, and offered his recommendations on his shares.
Bumble, which came out to the public with a lot of resignation to increase 63% on the first day, includes the European-based Badoo dating site on its umbrella. Match Group, which split last summer from IAC media holding, has a larger portfolio that includes Tinder, Hinge and OkCupid, among other connection services.
Their businesses, however, should cater to different investors, Cramer said.
“They’re both big companies. I think they’ll have a big 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 reached a market cap of $ 45.8 billion at the close.
Bumble is the faster producer of the two competitors, based on the figures of its S-1 presentation. In 2019, the company said total revenue was $ 488.9 million, 36% more than the $ 360.1 million in 2018. As for the year plagued by the 2020 pandemic, Bumble went reported total revenue of $ 416.6 million during the first nine months ending Sept. 30, $ 40. millions of which were said to have been generated between 1 and 28 January.
Compared to the same nine months of 2019, when total revenue reached $ 362.6 million, Bumble saw its business grow by 15% in the midst of the pandemic.
As for Match Group, the company recorded total revenue of $ 2.4 billion in 2020, which increased 17% from 2019. Its revenue grew 19% in 2019 from 2018, Cramer noted.
“If you’re a growth-oriented investor, Bumble is the way to go,” Cramer said. “Even after today’s amazing race, it’s the top growth stock.”
Bumble has a much smaller range than Match. In its brochure, Bumble said it had an average of 42 million monthly users in the third quarter and 2.4 million paying users as of September last year.
The party reported that it had nearly 11 million average subscribers in the fourth quarter of 2020, representing a 12% year-on-year improvement.
Bumble and Match executives hope to continue to expand their online dating business, with the old construction products for platonic connection and connection services.
A key difference between companies is that Match is profitable, while Bumble is still a company that loses money with improving margins, Cramer noted.
“If you have a more prudent approach to the market and still want to get an online dating exchange, Match is the way to go,” Cramer said.
Match shares, which closed Thursday at a record $ 172.13, are trading 16 times this year’s sales forecast, a valuation Cramer said was too cheap for a company with 17% growth .
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 they expect the numbers to explode once we reopen, ”Cramer said.
Bumble sells for 17 times sales, he added. According to FactSet data, the company is expected to record sales of $ 580 million in 2020, $ 723 million in the current year and $ 897 million in 2022
“In other words, they look very similar in relation to the selling price, even though Bumble grows twice as fast as Match,” he said.