Bumble (BMBL 1.95%), which lets only women make the first move on its namesake dating app, went public in February at $43 per share. The stock opened at $76 a share on the first trading day, peaked at $84.80 a few days later, but lost its momentum and dropped below its IPO price in May.

The stock now trades in the low $50s, but its volatile debut burned many investors. I recently weighed the bull and bear cases for Bumble's stock and concluded that it could still double or triple within the next five years if its revenue continues to rise about 20% annually.

Today, I'll dive deeper into the company's near-term challenges, its plans for the future, and how they could support its long-term growth.

A person uses a smartphone app while drinking a coffee.

Image source: Getty Images.

2021-2022: Overcoming the pandemic

Bumble's biggest near-term challenge is the pandemic. Its revenue increased 36% in 2019, but it grew just 19% in 2020 as more people stayed at home throughout the crisis. Growth accelerated again in the first half of 2021 as people started to go out again, and it expects its revenue to increase 29% to 31% for the full year.

However, the recent spread of the delta variant could still make it difficult for Bumble to hit those targets, even as the company claims it can continue to weather the pandemic-related headwinds.

During last quarter's conference call, CEO Whitney Wolfe Herd said, "Despite the challenges that the world is facing with the delta variant, we are continuing to see positive trends across our platforms, even in some of the most affected markets."

Next year, analysts expect Bumble's revenue to rise 24% to $943 million. We should take that estimate with a grain of salt, but the stock looks cheap at 10 times that estimate. Its bigger and slower-growing rival, Match Group (MTCH 2.31%), trades at 12 times next year's sales.

2023-2024: Expanding its geographic reach

Bumble and its smaller app Badoo are currently used across dozens of countries. It generated 55% of its revenue in North America last year and the remaining 45% from overseas markets.

Management doesn't disclose its overseas growth by individual countries yet, but it highlighted India as a major growth market for its namesake app last quarter. Even as the delta variant spread across India, the company's number of monthly active users (MAUs) increased 60% year over year during the quarter.

India's online dating market could grow at a compound annual rate of 17.6% between 2021 and 2025, according to Statista Research, making it one of the world's fastest-growing markets for dating apps. The firm expects user penetration rates for dating apps in India to rise from 3% in 2021 to 4.3% in 2025 (still less than a third of the United States' penetration rate of 15.2%).

Bumble might have an edge against its competitors in India because its app naturally shields its female users from unwanted advances. That emphasis on safety could address concerns about the escalation of violent attacks on women in India over the past decade.

It might also acquire smaller regional dating apps in the next few years to diversify its portfolio beyond its two main apps. By comparison, Match generates most of its revenue from Tinder but also owns more than a dozen other apps that target specific regions and demographics.

A woman wearing a hat stands on a street corner looking at her smartphone as a bus passes by her in the background.

Image source: Getty Images.

2025 and beyond: Expanding its non-dating features

Bumble and Badoo had 2.9 million paid users last quarter, compared to Match's latest tally of 15 million paying users. Over the next five years, Bumble will likely continue to grow at a faster rate than Badoo. It might acquire more apps to gain new users, but it could also expand Bumble's non-dating features to become a female-oriented social network.

Two main non-dating features are BFF, which focuses on platonic relationships, and Bizz, which is designed for business connections. Last quarter, Wolfe Herd said that 10% of MAUs were already using BFF, indicating it had "immense permission to be a much broader brand for friend-finding, and ultimately, a broader woman's lifestyle brand."

Bumble hasn't directly monetized BFF yet, but MAUs who accessed both its dating and BFF features generated a 30% higher average revenue per user (ARPU) than date-only users last quarter. Wolfe Herd noted that Bumble could eventually monetize BFF with ads.

In the future, the combination of BFF, Bizz, and other new non-dating features could support Bumble's evolution into a female-oriented social network. That expansion could differentiate it from Match's apps, generate fresh advertising revenue, and even support the integration of "social shopping" features.

A recent partnership with Snap (SNAP -1.16%), which integrated Snapchat's augmented-reality lenses into its video calls, highlights the company's growth potential beyond swipe-based dating. Bumble's first cafe and wine bar, which opened in New York this past summer, could also pave the way for more third-party restaurant partnerships for its apps.

Plenty of room for growth

Bumble still faces fierce competition from Match, but I believe there's enough room for more players to thrive in the online dating market. If Bumble overcomes the pandemic and continues to expand, it could generate much bigger profits for investors within the next five years.