With Women's History Month in full swing, why not consider investing in stocks that put women at the forefront? One potential idea along these lines could be dating specialist Bumble (BMBL -1.56%), whose namesake app puts women in charge in a crucial way: In heterosexual pairings, only they can kick off a conversation.

Bumble has been publicly traded for a little more than two years now, and in that time, it hasn't performed well at all. And despite its women-centric approach to online dating, the company will need more than that to turn things around for good. Is there a substantial upside for Bumble stock?

Let's look into the business to decide.

Bumble's portfolio of apps 

The Bumble app isn't the only one under the company's banner. It also owns Badoo, which is popular in South America and Europe. While both are among the leaders in the online dating world, they have been moving in opposite directions lately. The Bumble app continues to perform well, with meaningful user and revenue growth, while Badoo hasn't been so lucky.

The former added a half-million net new paying users in 2022, with its sales jumping 31% year over year. Badoo's paying users declined by about 15% year over year, while its revenue dropped by 10% compared to 2021. Bumble's total revenue for the year increased by 18.7% to $903.5 million, and its average revenue per user came in at $23.03, almost 7% higher than the previous year.

Bumble's total paying users grew by 10% year over year in 2022 to 3.2 million. The online dating specialist also owns Fruitz, a France-based app that targets Gen Z. It allows its users to easily match with like-minded persons by assigning fruits (hence the name) to the kind of relationship each person is seeking. 

The opportunities ahead

The online dating world is competitive. The biggest name in the industry is Match Group, which owns many websites and apps, most notably Tinder. Match Group ended 2022 with 16.1 million paying users, more than five times Bumble's total. One way in which Bumble can attract investors away from the larger Match Group is by growing at a much faster pace. Fortunately, that is what's been happening, at least on the top line.

BMBL Revenue (Quarterly YoY Growth) Chart

BMBL revenue (quarterly YoY growth) data by YCharts. YoY = year over year.

Bumble is also growing its user base across all of its apps at a faster pace. Last year, Match Group's 16.1 million payers dropped by 1% year over year. On the negative side, Bumble isn't consistently profitable. Last year, its net loss came in at $114.1 million, compared to the net income of $281.7 million reported in the previous fiscal year.

In fairness, the net loss was largely due to a non-cash impairment charge of $141 million incurred in the fourth quarter, related to the fact that the company ceased its operations in Belarus and Russia last year.

The good news is that Bumble's main growth driver, its namesake app, has shown no signs of slowing down. That's likely partly because of its women-centric approach, but the company is also building a competitive advantage through the network effect -- when the value of a service grows with use. Online daters want many options, and the more potential matches there are on a platform, the more it becomes attractive to future users.

It's also worth noting that dating apps aren't mutually exclusive. One can use both Tinder and Bumble -- and some people do just that. That's why investors should expect the Bumble App to continue on its northbound path in payers and revenue. That's especially the case since Bumble BFF has become one of the most popular friendship-finding apps.

Management has major hopes for this service, considering the prevalence of loneliness in countries like the U.S. A survey Bumble cites found that between 2018 and 2020, 60% of Americans struggled with loneliness, with that metric jumping to 75% in younger people. These results likely didn't factor in the full effect of the pandemic, which only made things worse.

In short, there is a massive opportunity for Bumble BFF in platonic friendships. But what about Badoo? While the company expects the app to continue losing users in 2023, it is working to stabilize things and increase monetization on the platform. And as management points out, it remains one of the top three dating apps in dozens of markets.

Questions will keep swirling around Badoo, but the Bumble app is more than making up for it in terms of revenue and user growth. And with a vast market in online dating remaining untapped (for instance, use is very low in Asia, the most populous region), Bumble still has plenty of growth potential. 

While not yet a no-brainer buy, Bumble is a solid option for investors willing to endure some volatility and hold shares for years. If the company's master plan works, it could deliver excellent returns down the line.