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'There's no recession in love': Jefferies analyst

·3 min read
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"All you need is love," wrote John Lennon and Paul McCartney.

And Wall Street is buying into this thematic stock play.

Shellshocked investors who were sitting on fat returns last year have seen much — if not all — of their winnings go up in smoke in 2022. It's a different market now, investors are facing "recession" headlines, and they want to know what to buy. Typically, stocks that hold up well when the economy heads south are names like Walmart (WMT) and General Mills (GIS).

But you can add Bumble (BMBL) and Match (MTCH) to that list as well, says Brent Thill, equity analyst at Jefferies.

"There's no recession in love," Thill told Yahoo Finance Live on Thursday. "You need shelter, food and love."

Thill notes that as people reorganized their lives over the last two years — moving to different cities or buying a second home — they've needed to engage in a search for new friends and partners. And this search is a tailwind for online dating companies.

The Bumble Inc. (BMBL) app is shown on an Apple iPhone in this photo illustration as the dating app operator made its debut IPO on the Nasdaq stock exchange February 11, 2021.       REUTERS/Mike Blake/Illustration
The Bumble Inc. (BMBL) app is shown on an Apple iPhone in this photo illustration as the dating app operator made its debut IPO on the Nasdaq stock exchange February 11, 2021. REUTERS/Mike Blake/Illustration

"You need community around you. You need friends and your family. And you need love," Thill says.

Thill notes that at the restaurant across the street from his perch at Jefferies' offices, "there's a margarita called 'Mother of Dragons' that's $30 — for one margarita. The cost of a dating app is 15 to 30 bucks a month...It's incredible the value that daters get for what they pay."

Bumble shares rose over 10% on Thursday, and the stock has doubled off its March low of $15.41. Shares are still down two thirds from a record $84.80 hit the day after its IPO.

Thill lowered his price target on BMBL to $30 from $36 because of pressures on the company's margins. And as an enterprise expanding internationally — from Germany to Brazil — Bumble is facing currency headwinds from the strong dollar. The company is also facing higher costs in the Google Play app store.

But Thill is impressed that none of this altered the company's outlook for sales this year, and he maintains a "Buy" rating on shares.

"With their female-first app, [Bumble] can diversify to this incredible $30 trillion spend for females. And that's a really big opportunity," Thill says. "They can unlock female spending power."

Thill likes Match stock as well, citing its panoply of apps that target age from Gen-Z to Boomers.

"[Match has] an app for every lifestyle. They have an app for every geographic region — Japan, Europe, the U.S.," Thill says. "They're incredibly well diversified."

As a married man of 20 years with children, Thill concedes he isn't using any dating apps.

"I talk to my friends that are single and other colleagues that are using it and will use it," Thill says, "and I think there's incredible value in what these companies have."

Jared Blikre is a reporter focused on the markets on Yahoo Finance Live. Follow him @SPYJared.

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