Wall Street analysts are betting on another online dating boom, but investors still aren't sure about the swipe-right revolution

• Wall Street experts are placing bets on another online dating app boom, despite their dismal performance since 2021.
• Players like Match Group have shed around 75% from their all-time peak in 2021.
• But online dating isn't dead, analysts say - though investors are wary of placing bets on love as a recession looms.

Online dating apps could be on the verge of another boom, according to Wall Street experts, who have turned more bullish on the likes of Match Group and Bumble despite their stock prices cratering in recent years. 

The optimism seems hard to justify to investors who remain skeptical on dating apps after witnessing the key names plunge from their all-time-highs in late 2021. Match Group, the parent of Tinder and Hinge, has shed 75% of its value since hitting a record share price of $169.53, though the stock has rebounded 20% over the last month to $42 a share.

Bumble, meanwhile, has tumbled 77% from its initial public offering of $75.46, and has only barely recovered, inching 2% higher the past month to $16.63 a share. 

Still, no analyst following either stock has assigned a "sell" rating, according to data from MarketBeat, with experts citing strong growth prospects and the popularity of online dating as key factors that could carry the shares higher, even as the economy flirts with a potential downturn.

Bank of America analyst Nat Schindler told Insider he sees 66% upside for Match and has a price target for the dating app giant of $70 a share. For Bumble, he says the stock has 74% upside, predicting shares to hit $29.

That's largely because both stocks are "extraordinarily cheap" when considering their valuation to cash flow, Schindler said, a measure that can indicate if a stock is overvalued. The forward valuation to cash flow ratios for both companies suggest that they're relatively undervalued and that double-digit growth is realistic for both firms. 

Schindler also doesn't foresee a recession in online dating, despite fears that a downturn could cause consumers to pull back on discretionary spending, such as, say, their Tinder subscriptions. Online dating is the most popular way that new couples meet, per a 2019 study by a Stanford sociologist, with the industry set to grow 7.6% over the next seven years, according to an analysis from Grand View Research. 

Those trends are hard to reverse even as the economy tips into gloomier times. He also argues against the notion that money spent on online dating app is discretionary.

"If we want to continue as a species, [dating apps] have become the de-facto way of meeting people for relationships. Human connection like that is right there with food and shelter on Maslow's hierarchy of needs. It's not a luxury good. It's a human need," Schindler added.

Sam Yagan, the co-founder of OkCupid and former CEO of Match, told Insider that the years following the 2008 recession were actually OkCupid best years. 

In his view, people are more likely to scale back on the expense of dates itself rather than eliminate dating in of itself.

"I think the most efficient way to entertain yourself is to have a boyfriend of girlfriend. That is free," he said. "I'm definitely long love going forward."

Investors are not quite on the same page, according to Wells Fargo analyst Brian Fitzgerald. He noted that Match and Bumble both began tumbling from their peaks shortly after the Fed began raising interest rates to fight inflation — a move that hammered the tech sector broadly in 2022 as investors braced for tighter financial conditions.

But even with the trouble that's pressured stocks over the past year, engagement patterns on major dating apps haven't really fallen off, Fitzgerald said. He described activity as something that ebbs and flows, but is mostly consistent.

"There's all kinds of reason why a bear would say that stock isn't worth what Fitzgerald says it is, but when I look at the fundamentals of the business, they're still fairly resilient," he said. 

That leaves firms with the challenge of convincing investors of that future. Match's Tinder has made a number of sweeping changes to prepare itself for a potential economic downturn, Fitzgerald said, which includes offering short-term weekly subscriptions to entice new users and launching a massive brand revamp — the firs time it's done so since going viral over a decade ago. 

For many on Wall Street eyeing the online dating space, it's a "wait and see" story, Schindler said.

"What [the apps] are telling people will happen should be enough to make them excited. But they're waiting for the results to actually happen," Schindler told Insider.