How to Buy Bumble Shares UK – With 0% Commission

The dating app Bumble recently made a splash on the NASDAQ. The stock jumped over 60% during its IPO and now has a market cap of over $8 billion.

Bumble enters a crowded field – it’s far from the only platform built for people in search of love. However, there are several reasons to be optimistic about this app’s prospects, including the company’s ambitious and young founder.

Want to buy Bumble stock before it has a chance to take off? We’ll show you everything you need to know about how to buy Bumble shares in the UK and cover why we think this stock is a buy today.

Step 1: Find a UK Stock Broker to Buy Bumble Shares

The first step in buying Bumble shares is to find a UK stock broker that offers them for trading. Bumble just IPO’d two weeks ago and it trades on the NASDAQ stock exchange, so not every platform has these shares just yet.

That said, two of our top-rated UK brokers are not only offering trading on Bumble shares – they’re also allowing you to trade with 0% commission.

Step 2: Research Bumble Shares

Bumble is a newcomer to the NASDAQ exchange. As with any new stock, it’s important to do your research to find out what’s driving this company’s growth, whether it’s sustainable, and whether the current stock price reflects that future potential.

So, let’s dive into Bumble’s history and financial data to help you decide whether this stock is a buy today.

Bumble Stock Price History & Market Capitalisation

Bumble held its IPO on the NASDAQ stock exchange on February 11, 2021. The company priced its shares at $43, up from an expected range of $37 to $39 before the IPO. Bumble sold 50 million shares, bringing in over $2 billion in new capital.

The company’s shares initially began public trading at $76 per share, a 77% increase over the IPO price available to market insiders. At the end of the first day of trading, Bumble stock closed up 63.5% above the IPO price.

Over the next few days, Bumble stock hit a high of $84.80 per share before falling to retest the $70 level. Today, the shares are trading at $71 apiece and Bumble has a market cap of $8.2 billion.

Bumble EPS and P/E Ratio

Bumble reported a profit of $68.6 million in 2019, but a loss of $84.1 million in 2020 despite notching a 4% increase in revenue year-over-year.

Based on 2019 numbers, Bumble would have an earnings per share (EPS) of $0.29 and a price-to-earnings (P/E) ratio of 119.5. Based on the 2020 loss, Bumble has an EPS of -$0.35.

Bumble Stock Dividend Information

Bumbe has not announced any plans to pay a dividend either this year or in the future. The company lost money in 2020, so it’s unlikely that it will pay a dividend in the next several years.

Should I Buy Bumble Shares?

Bumble shares are currently worth a lot more than the Wall Street bankers who underwrote the IPO thought they were. But that’s hardly a strong argument that Bumble is overvalued – many companies that IPO’d last year exploded in value as soon as they hit the public market, and they haven’t come down yet.

In fact, if anything, we think that Bumble is an undervalued stock. Here’s why.

Bumble’s Revenue Model

Bumble is, above all else, a dating app. The success of this stock will depend almost entirely on the success of the Bumble app – that is, whether it can gain more users and monetize them effectively.

Bumble operates on a ‘freemium’ model, so users can use the app for free but have to pay for a subscription if they want to unlock more advanced features. Right now, around 9% of Bumble’s user base is willing to pay for features.

We like this model because it provides an easy hook for users to make the switch to Bumble, and then keeps them there once they decide to upgrade to a subscription. On top of that, the subscription fees – which are charged weekly rather than monthly – provide excellent cash flow for Bumble. Bumble also has room to bring in more advertising if it needs to boost revenue, although it has reasonably avoided overwhelming users with ads so far.

Bumble’s Market Share

One of the most encouraging things about Bumble is that it’s been extremely fast to take market share away from its closest competitor, Match Group (which owns dating apps such as Tinder and OKCupid). As of last fall, Bumble has more than 12 million active monthly users – up from just 5 million in 2019.

That fast growth can also be a risk, as it shows that a new app in this space can quickly steal market share from established competitors.

However, we think that Bumble’s growth is better attributed to its unique proposition. Bumble requires that women make the first move, and the app has a zero-tolerance policy for sexual harassment and bad behavior. It’s essentially created a safe space for virtual dating, whereas most other platforms feel like the Wild West.

Whitney Wolfe Herd

It’s impossible to talk about Bumble’s prospects for growth without talking about the company’s founder and CEO, Whitney Wolfe Herd. At 31 years old, she’s the youngest female founder to take a company public in the US and one of only a few women to do so.

She’s also a former founder of Tinder, and her experience with sexual harassment at that company has been a big influence in Bumble’s trajectory. When Wolfe Herd talks about keeping Bumble free of harassment and lewd behavior, she means it. Importantly, users know that and it’s a big part of the reason so many are willing to pay for Bumble’s services.

Wolfe Herd is perhaps the reason to be most excited about Bumble’s future growth prospects. She’s young, ambitious, and has a clear vision for how to differentiate Bumble from its competitors. With her at the company’s helm, look for Bumble to continue growing while doubling down on the aspects that have made the platform so popular among users.

The Verdict

Bumble is one of the hottest new stocks on the US market. While it’s pricey, the shares are currently retesting their price floor – which means right now is an opportunity to get in on this dating app stock at a bargain price.

We’re bullish on Bumble’s long-term prospects thanks to the company’s demonstrated ability to turn a profit, its rapid user growth, and the vision of its young founder and CEO.

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