Citi analysts have lowered their estimates and price targets for Bumble (BMBL) and Match Group (NASDAQ:MTCH) ahead of the 2Q24 earnings release, citing continued softer app trends and a product roadmap that requires more patience.
Analysts have also opened downside catalyst watches for both companies, reflecting their cautious outlook on the second half of 2024.
The firm notes that app data from SensorTower has remained weak for Bumble, and while Tinder's monthly active user (MAU) growth has been more stable, neither trend suggests a significant improvement.
Citi noted, "Improvements from product innovation, needed for sustainable growth, may be less impactful in 2H24." This cautious view is based on Match's more patient tone and the unfavorable app data for Bumble following its recent relaunch.
Analysts believe this sets up a challenging scenario for the full-year guidance, given the expected growth acceleration in the second half of the year.
For Bumble, Citi has lowered the price target to $12 from $14 due to reduced estimates and slightly lower multiples. The firm stated, "App trends per SensorTower) have remained challenging in 2Q24, and we have not yet seen a positive growth inflection post the April 30 app relaunch."
They maintain a Buy rating, expressing confidence in Bumble's potential to accelerate growth in 2025 despite the current challenges.
Regarding Match Group, Citi reduced the price target to $33 from $34, again citing lower estimates and management's cautious tone about the timing of product-driven growth. The firm reiterated its Neutral rating, reflecting a more reserved stance on Match's 2H24 growth outlook.
Citi's analysts have opened 30-day downside catalyst watches for both Bumble and Match Group, highlighting the downside risk to estimates given the current trends.
Despite investor sentiment and valuations being at or near trough levels, Citi emphasized that "current trends and lack of a clear catalyst remain a challenge."