Singapore markets close in 3 hours 17 minutes
  • Straits Times Index

    3,233.73
    +31.84 (+0.99%)
     
  • Nikkei

    26,842.44
    +182.69 (+0.69%)
     
  • Hang Seng

    20,526.12
    -76.40 (-0.37%)
     
  • FTSE 100

    7,518.35
    +53.55 (+0.72%)
     
  • BTC-USD

    29,949.82
    -396.46 (-1.31%)
     
  • CMC Crypto 200

    673.12
    +430.44 (+177.37%)
     
  • S&P 500

    4,088.85
    +80.84 (+2.02%)
     
  • Dow

    32,654.59
    +431.17 (+1.34%)
     
  • Nasdaq

    11,984.52
    +321.73 (+2.76%)
     
  • Gold

    1,808.40
    -10.50 (-0.58%)
     
  • Crude Oil

    113.88
    +1.48 (+1.32%)
     
  • 10-Yr Bond

    2.9680
    0.0000 (0.00%)
     
  • FTSE Bursa Malaysia

    1,554.76
    +6.16 (+0.40%)
     
  • Jakarta Composite Index

    6,690.63
    +46.17 (+0.69%)
     
  • PSE Index

    6,684.67
    +90.01 (+1.36%)
     
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.

3 reasons why you should invest in love, says Goldman Sachs

·Anchor, Editor-at-Large
·2-min read
In this article:
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.

Investing in love by putting money to work in underperforming dating app stocks such as Bumble (BMBL) and Match Group (MTCH) makes a lot of sense right now, argues Goldman Sachs.

"In the years ahead, we expect the industry to benefit from a number of structural tailwinds including (1) erosion of social stigma, (2) increased access to the internet and mobile devices, (3) growth in the number of singles, and (4) heightened adoption of freemium models and subscriptions which we think will translate into sustained payer and revenue/payer growth for both Match Group & Bumble," said Goldman Sachs analyst Alexandra Steiger in a research note on Thursday.

Shares of Match, which owns Tinder, and Bumble by and large haven't priced in Steiger's upbeat industry thesis, reflecting concerns about social mobility amidst the COVID-19 pandemic.

Bumble's stock currently trades at $33, well below the $43 price set for the company early February 2021 IPO. As for Match Group, its stock has nosedived 30% since hitting a 52-week high on Oct. 21 of last year.

But now is the time to strike on each, Steiger thinks.

Goldman Sachs swipes right on dating app stocks.
Goldman Sachs swipes right on dating app stocks.

Steiger initiated coverage of Bumble at a Buy rating and a $54 price target, which assumes a 63% pop in the stock price. The analyst thinks Bumble is primed to capitalize on a strong outlook for dating by way of its female friendly user platform.

"By offering a women empowerment branding message, we see Bumble as uniquely positioned within the online dating landscape that should benefit from a number of secular industry tailwinds, continued platform innovation, domestic and international growth and category expansion (with Bumble BFF and Bizz)," Steiger says.

An AFP journalist holds his phone showing the dating application Bumble on February 26, 2020 in Washington,DC. - Days ahead of the Iowa Caucuses vote, Rhiannon Payne was on the Bumble dating app -- not to find a partner but to press her case for her candidate, Elizabeth Warren. 
Payne, a 28-year-old digital communications consultant, flew from San Francisco with a friend to volunteer for the Warren campaign and the two women came up with the idea while sitting in a hotel room.
One analyst thinks Bumble is primed to capitalize on a strong outlook for dating by way of its female friendly user platform. (Photo by Eric BARADAT / AFP) (Photo by ERIC BARADAT/AFP via Getty Images)

Steiger is slightly less bullish on Match, only modeling for a 27% increase in its stock price. But still, Steiger sees Match shares as one to own given its strong portfolio of dating assets (Tinger, Hinge, Match.com, OKCupid, Meetic).

Explains Steiger, "by offering a portfolio of dating apps that tailor to a certain demographic and/or geographic, we see Match Group as a leader in the large and growing global online dating market that should benefit from a number of industry tailwinds, continued platform innovation, domestic and international growth and category expansion, most notably into social discover."

Brian Sozzi is an editor-at-large and anchor at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.

Follow Yahoo Finance on Twitter, Facebook, Instagram, Flipboard, LinkedIn, YouTube, and reddit

Our goal is to create a safe and engaging place for users to connect over interests and passions. In order to improve our community experience, we are temporarily suspending article commenting