Match Group, Bumble's Growth Stalls: Analyst Warns Of Challenging 2025

by

The online dating industry may have hit its roughest patch yet. With global online dating spend flatlining at a projected 0% growth in 2025, JPMorgan analyst Cory Carpenter sees stagnation stemming from a lack of innovation and waning interest among younger users.

While AI promises a future of smarter matchmaking, Carpenter believes turnaround efforts at Match Group (NASDAQ: MTCH) and Bumble Inc. (NASDAQ: BMBL) are still in their early days, signaling a challenging year ahead.

Match Group: Tinder Turnaround Stumbles

  • Rating: Neutral
  • Price Target: $33
  • Upside: Margin expansion amid declining revenue
Match's marquee app, Tinder, continues to face payer declines despite ambitious AI-driven product roadmaps. With a return to revenue growth not expected until 2027, the near-term outlook remains grim. Carpenter highlights Tinder's ongoing struggles to stabilize user and revenue trends, noting, "Tinder's turnaround will likely take years, and hedge funds remain cautious."

Key catalysts for 2025 include biometric screening tests, AI-enabled discovery features, and potential activist pressure. Despite a 2.4% dividend yield and promising margin-focused strategies, investor skepticism looms.

Bumble: Slow Burn In A Turnaround

  • Rating: Neutral
  • Price Target: $8
  • Upside: Modest buyback potential, M&A opportunities
Bumble's pivot to reinvigorate growth is off to a rocky start, with 2024's app relaunch falling flat. Revenue is expected to decline again in 2025, with key competitor Hinge continuing to gain ground.

Carpenter remains unconvinced by Bumble's upcoming product features, stating they "feel more incremental than transformative."

The winter product release, featuring innovations like AI-powered photo selection and ID verification, offers only a glimmer of hope amid uncertainty. Management's focus on ecosystem strengthening and customer experience innovation may need more time to show meaningful results.

Industry Shake-Up Coming?

Despite dim short-term prospects, Carpenter sees potential for industry consolidation, though he remains skeptical about near-term take-private deals.

The dating industry's next chapter might hinge on bold AI-driven product innovation or game-changing mergers to reignite growth.