Bumble's (NASDAQ:BMBL) stock recently fell below its IPO price after the online dating company posted its first-quarter earnings. The decline was surprising since Bumble easily beat analysts' expectations.

Its revenue rose 43% year over year to $170.7 million and beat estimates by $6.1 million. Its adjusted EBITDA surged 108% to $46.1 million, and it posted a net profit of $1.69 per share, compared to expectations for a net loss. However, most of those profits came from a one-time tax benefit.

For the full year, Bumble expects its revenue to rise 34%-35% and for its adjusted EBITDA to increase 24%-27%. Both estimates surpassed analysts' expectations, but investors still fled the stock -- presumably due to the rotation from growth to value in this jittery market. But despite that pressure, I believe it's still smarter to buy Bumble than sell it at these levels, for three simple reasons.

Three of Bumble's "brand ambassadors" promote the app.

Image source: Bumble.

1. Carving out a high-growth niche

The bears believe Bumble will struggle to compete against Match Group (NASDAQ:MTCH), the online dating giant that owns Tinder and other popular apps like Hinge, Meetic, Pairs, BLK, Chispa, and Plenty of Fish.

However, Bumble's namesake app has carved out a growing, defensible niche by allowing women to make the first move. It also owns Badoo, an older dating app that is popular in Europe and Latin America.

Its total number of paying users rose 30% year over year to 2.8 million during the first quarter. Bumble's paying users increased 44% to 1.35 million, while Badoo's paying users grew 19% to 1.45 million.

Bumble generated two-thirds of its first-quarter revenue from its namesake app, which generates much higher average revenue per paying user (ARPPU) than Badoo. Bumble's ARPPU increased 12% year over year to $27.75, while Badoo's ARPPU rose 4% to $12.76.

Those growth rates, along with its sunny guidance for the full year, indicate Bumble's female-oriented niche is expanding and it isn't losing any ground to Match's army of dating apps. 

2. An expanding ecosystem with monetization opportunities

Bumble and Badoo are both freemium platforms, which grant paid users higher visibility, unlimited swipes, and other perks. But Bumble has also planted the seeds for future social networks with Bumble BFF, which is designed for friendships, and Bumble Bizz for business connections.

Bumble's mobile app.

Image source: Bumble.

Bumble hasn't monetized these newer features yet, but CEO Whitney Wolfe Herd noted the average time spent on BFF rose 44% and 83% for women and men, respectively, during the first quarter. She also noted 90% of women who initiated conservations on BFF in March found "at least one match."

Wolfe Herd says Bumble sees a "huge opportunity" with BFF in "people looking for community and friendship through many life stages" -- which suggests it could expand far beyond online dating. Bumble Bizz might also eventually pull users away from saturated professional networks like LinkedIn.

3. It's a reasonably valued reopening play

The sell-off in tech stocks over the past few months has been driven by two factors. First, rising bond yields sparked a rotation toward cheaper value stocks. Second, rising vaccination rates caused investors to pivot from pandemic stocks toward reopening plays.

Bumble was pricey when it opened at $76 a share on its first trading day in February, which was 77% above its IPO price and valued the company at $14 billion. But today it's hovering near its IPO price, with a market cap of $7.9 billion -- which values the company at just 11 times this year's sales.

Match, which is expected to generate just 20% sales growth this year, trades at 13 times this year's sales. Match is more profitable than Bumble, but Bumble's stronger revenue growth and lower price-to-sales ratio suggest it's a better value right now.

Bumble is also a reopening play since more people will likely seek out dates as businesses reopen. During the conference call, president Tariq Shaukat said the company was "optimistic about things as vaccinations continue to roll out as the economies continue to reopen."

In other words, it doesn't make sense to toss Bumble out with the overvalued "hypergrowth" tech stocks or pandemic plays. It was expensive in the past, but it's now a reasonably valued reopening play.

The future still looks bright

Bumble could remain out of favor over the next few months as the market blindly punishes growth stocks. But I believe Bumble still has plenty of growth potential, and I recently added more shares after its recent price drop instead of tossing this baby out with the bathwater.

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.