Grindr Gets First Buy Rating as Cowen Sees Growth Outpacing Tinder Owner
(Bloomberg) -- Grindr Inc.’s focus on the LGBTQ+ community promises faster revenue growth than the dating app industry titans, Match Group Inc. and Bumble Inc., according to the first Wall Street firm to rate the stock a buy.
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The initiation — from TD Cowen — marks the stock’s first bullish rating since closing a merger with a blank-check company in November 2022, according to data compiled by Bloomberg.
“Grindr’s social dating app targets a global LGBTQ+ demographic which is growing faster than the overall population,” analyst John Blackledge wrote in a note kicking off his coverage Thursday. That expansion should drive Grindr’s annual revenue growth to outpace that of Tinder owner Match as well as Bumble over the next six years, he said.
That’s welcome news for investors as Grindr has lagged its app rivals, falling more than 70% since its de-SPAC. Slowing growth, intensifying competition and struggles in retaining paid users have all plagued the sector.
More so than peers, Grindr has the runway to continue improving app functionality while also launching new features as it expands internationally, Blackledge wrote.
“There is room to improve the user experience and expand product offerings, driving new user growth, further engagement, and increased payer conversion on a long term basis,” Blackledge wrote.
Grindr shares rose 1.6% in New York to $9.92, with Blackledge’s price target of $12 per share implying more than 20% upside over the next 12 months. So far this year, the stock has risen roughly 12%.
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