When Bumble (BMBL) founder Wolfe Herd lost the billionaire status, it was another sign that the dating app would continue its decline. Bumble is among the post-pandemic stocks whose prospects continue to worsen.
In Q3/2023, the firm reported revenue of $275.51 million, up by 18.4% Y/Y. It earned just 12 cents a share. With a forward price-to-earnings ratio of over 50 times, BMBL stock could lose at least 20% or more.
Corsair (CRSR) is another flop for investors. After railing to break out above $18, the stock traded as low as $11.45. In Q3, it earned 13 cents a share. The P/E in the 21x level is too high for a premium gaming PC supplier that does not have a moat. In addition, costs for parts are not falling. This will increase prices or pressure Corsair’s margins.
In the insurance sector, Lemonade (LMND) took advantage of the market’s bullish reaction to its GAAP EPS of -$0.88. Markets responded positively to the Q4 revenue forecast of up to $109 million, above consensus. The firm has an 88% loss ratio. This is unsustainable for an insurance company.
Beware of all three firms. The market is unwilling to speculate on companies struggling to grow or report robust profits.