After dating service Bumble made its market debut on Thursday, CNBC’s Jim Cramer compared his business performance to his main rival, Match Group, and made recommendations on their stocks.
Bumble, which was made public with much fanfare to amass more than 63% on its first day, includes European-based dating site Badoo in its umbrella. Match Group, which was spun off from media holding companies IAC last summer, has a larger portfolio that includes Tinder, Hinge and OkCupid.
However, their companies should serve different purposes for investors, Cramer said.
“They are both great companies. I think they will have great numbers in the second half, they just have different roles in your portfolio,” he said of “Mad Money.”
Launched by Whitney Wolfe Herd in 2014, Bumble was priced at $ 43 before it started trading under the ticker symbol “BMBL”. It had a market value of $ 13 billion at close with a share price of $ 70.31. Match Group had a market capitalization of $ 45.8 billion at close.
Bumble is the faster grower of the two competitors, based on numbers in its S-1 filing. In 2019, the company said total revenues were $ 488.9 million, nearly 36% higher than $ 360.1 million in 2018. As for the pandemic-plagued year 2020, Bumble reported total revenues of $ 416.6 million during the year. first nine months ended September 30, $ 40 million said to have been generated between January 1 and January 28.
Compared to the same nine months in 2019, when total revenues were $ 362.6 million, Bumble saw its business grow 15% during the pandemic.
As for Match Group, the company posted full-year 2020 total sales of $ 2.4 billion, which is an increase of 17% over 2019. Revenues grew 19% in 2019 over 2018, Cramer noted. on.
“If you’re a growth investor, Bumble is the way to go,” said Cramer. “Even after today’s incredible run, it is the superior growth stock.”
Bumble has a much smaller range than Match. In its prospectus, Bumble said it had 42 million monthly average users in the third quarter and 2.4 million paying users through September last year.
Match reported that it averaged nearly 11 million subscribers in the fourth quarter of 2020, representing a 12% year-over-year improvement.
Bumble and Match executives hope to expand their online dating business with the former platonic matchmaking building products and network services.
A key difference between the companies is that Match is profitable, while Bumble is still losing money with margins improving, Cramer points out.
“If you take a more cautious approach to the market and still want an online dating stock, then Match is the way to go,” said Cramer.
Match shares, which closed at a record high of $ 172.13 on Thursday, are trading at 16 times this year’s sales estimates, a valuation that Cramer said was far too cheap for a company growing 17%.
Based on FactSet estimates, Match is expected to generate revenues of $ 2.8 billion this year and $ 3.31 billion by 2022.
“People pay [for Match] because they expect the numbers to explode as soon as we open again, ”Cramer said.
Bumble is selling for 17 times the sale, he added. According to figures from FactSet, the company is expected to achieve full-year 2020 sales of $ 580 million, $ 723 million in the current year and $ 897 million by 2022.
In other words, they are very similar on a price-to-sales basis, even though Bumble is growing at twice the rate of Match, ”he said.