Consumers are becoming more price sensitive, but not when it comes to finding love and connection. Bumble (BMBL 1.96%), the online dating platform, recently announced strong sales growth for the period that ended in late June while taking a big step toward profitability.

The management team celebrated the positive momentum while slightly lifting their 2022 sales expectations. That boost helped set the company apart from peers like Match, which is seeing weaker results in some of its dating apps.

Does Bumble's improving financial picture make the stock a buy right now, or might the business struggle to keep standing out in a crowded space?

Let's take a closer look.

Better growth

Bumble's latest results contained plenty of good news about the business. Not only did its core Bumble app gain 149,000 new paying users over the last 3 months, but those date seekers paid $29.38 per month, up from $28.81 per month a year ago.

Investors love to see progress on both scores because a growing user base will amplify even small increases in average monthly spending. It is also a strong signal that Bumble is providing a valuable service when it can grow its customer base while raising prices. "With its powerful women-first approach," CEO Whitney Wolfe Herd said in a press release, "Bumble App drove robust paying user growth."

Improving finances

Bumble still isn't generating sustainable profits. While management likes to tout adjusted earnings, which doesn't include big expenses like stock-based compensation, reported earnings haven't been positive. The company lost $6 million, or 3% of revenue in Q2, compared to $11 million, or 6% of revenue a year ago.

It is encouraging that losses are moderating. And free cash flow trends imply that brighter days are on the way. Bumble has generated $45 million of operating cash flow in the past six months, compared to an outflow of $31 million a year earlier.

Looking ahead

A Bumble investment would come with risks. The dating app market might see weaker sales if economic growth slows or competitors start cutting prices. Bumble might struggle to lift its average monthly charges above $30, too.

Still, user growth is accelerating today, with user gains rising in each of the last two quarters. That success could be evidence of the type of sustainable competitive advantage that delivers market-thumping returns to investors.

If the company can continue expanding its user base, it seems likely that Bumble will soon start generating significant profits. From there, the stock's path will depend on where profitability settles as the business matures. The growth stock is far from that point, though, as it still has room to expand both in established markets like the U.S. and the international segment.

While it is anyone's guess where annual earnings might land in a few years, Bumble is making strides at constructing a larger, more efficient business. Investors shouldn't ignore those gains and focus too much on short-term challenges like a potential slowdown in consumer spending on the way.