Bumble (NASDAQ:BMBL), Match Group's (NASDAQ:MTCH) top rival in the online dating market, went public on Feb. 11. Its IPO was priced at $43 a share and surged to $70 on the first day of trading. That rally boosted Bumble's market cap to about $14 billion, but it remains smaller than Match, which is worth over $45 billion and owns popular dating apps like Tinder and Hinge.

But Bumble's namesake app -- which requires women to make the first move -- is still growing rapidly and expanding with new features, including Bumble BFF for friendships and Bumble Bizz for professional connections. It also owns Badoo, an older dating app that is more popular in Europe and Latin America.

Bumble's blockbuster debut also buoyed shares of Match, which slipped in early February after its mixed fourth-quarter report. I previously highlighted Bumble as a top IPO pick for 2021, but is it still a better buy than Match after its recent gains?

Bumble's mobile app.

Image source: Bumble.

The differences between Bumble and Match

Whitney Wolfe Herd, who previously co-founded Tinder, and Russian billionaire Andrey Andreev, who founded Badoo, co-founded Bumble with the backing of Blackstone Group (NYSE:BX). Blackstone subsequently bought out Andreev's stake and handed the reins over to Wolfe Herd.

Most of Bumble's monthly active users (MAUs) still come from Badoo. It ended the third quarter of 2020 with 28.4 million MAUs on Badoo and 12.3 million MAUs on Bumble. Bumble had 1.1 million paid users, while Badoo had 1.3 million paid users.

Bumble has a smaller audience than Badoo, but it's growing faster and generating much higher average revenue per user (ARPU). As a result, 61% of Bumble's revenue came from its core app in the first nine months of 2020, and the rest mainly came from Badoo.

A woman tries to hide from a blind date.

Image source: Getty Images.

Match is a former subsidiary of the media holding company IAC (NASDAQ:IAC). IAC incorporated Match in 2009 to house all its online dating platforms, including Match.com and OkCupid, and incubate new dating apps like Tinder. IAC spun off Match in an IPO in 2015, then divested its stake last year.

Match usually discloses its number of paid users across all its apps instead of its MAUs. It ended 2020 with 10.9 million paid subscribers across all its services, and direct revenue from Tinder accounted for 58% of its top line.

Match's main advantage against Bumble is its diversification. Bumble can't count too much on Badoo if the growth of its namesake app decelerates, but Match can still rely on Hinge and other apps if Tinder loses its mojo.

Bumble and Match both generate most of their revenue from paid services instead of ads. Their paid perks include unlimited swipes, "super" likes to get a user's attention, the ability to boost your profile's visibility, and the ability to see who likes you right away.

Which company is growing faster?

Bumble's revenue rose 36% to $488.9 million in 2019, but it increased just 4% year over year to $376.6 million in the first nine months of 2020 as Badoo's 9% decline largely offset Bumble's 14% growth.

The ARPU of both apps declined during the pandemic, as homebound users spent less money, but Badoo -- which lacks Bumble's female-first features -- fared worse.

But that slowdown could be temporary: Analysts expect Bumble's revenue to rise 19% to $580 million for the full year, then rise another 25% to $723 million in 2021 as the pandemic passes. Based on those forecasts, Bumble trades at about 20 times forward sales.

Match's revenue grew 19% to $2.1 billion in 2019, and it rose another 17% to $2.4 billion in 2020, led by Tinder's 18% growth in direct revenue. Tinder's ARPU also slipped throughout the crisis, but Match's total ARPU still increased as its non-Tinder apps gained more users.

Analysts expect Match's revenue to grow 17% to $2.8 billion in 2021. The stock trades at about 16 times that forecast, which makes it slightly cheaper than Bumble.

But profits still matter

Match is consistently profitable, but Bumble isn't. Match's earnings grew 12% in 2019 and 6% in 2020, and are expected to rise another 12% in 2021.

That estimate gives Match a forward P/E ratio of 76, which is pricey relative to its earnings growth. Those estimates also likely don't account for its planned $1.7 billion purchase of the South Korean social discovery firm Hyperconnect, which may strengthen its business in Asia but throttle its near-term earnings.

Bumble posted a profit of $85.8 million in 2019, compared to a loss of $23.7 million in 2018. But in the first nine months of 2020, it posted a net loss of $84.1 million -- down from a profit of $68.6 million a year ago. It remains profitable on an adjusted EBITDA basis.

The winner: Bumble

Bumble faces near-term challenges, but it's cheaper than many other recent tech IPOs relative to its sales. It has fewer moving parts and could grow much faster than Match after the pandemic passes.

Match is still a solid online dating stock, but it won't attract as many bulls in this growth-oriented market. Therefore, investors with an appetite for risk should swipe right on Bumble instead of Match.

This article represents the opinion of the writer, who may disagree with the "official" recommendation position of a Motley Fool premium advisory service. We're motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.