Morgan Stanley Upgrades Grindr (GRND) to Overweight

Morgan Stanley analyst Nathan Feather upgraded Grindr (NYSE: GRND) from Equalweight to Overweight with a price target of $18.00 (from $15.00).

The analyst comments: “Grindr is an underappreciated company with strong network effects, industry-leading engagement, and significant profitability. However, the stock is down 36% over the past year on concerns that paywall-led monetization was impacting user growth. We initially shared those concerns, but have grown meaningfully more constructive as GRND has pivoted towards healthier product-led monetization with the upcoming launch of its ultra-premium tier EDGE (~$100 $500/mo.) and telehealth brand Woodwork (a HIMS competitor). Either could be individually transformative for GRND, but with both in development we now have conviction the brand can grow revenue at a 18% '25-'28 CAGR… with far more upside than downside. With the stock trading at just 11x '27 EBITDA, a ~35% discount to peers on a growth-adjusted basis, we see a compelling entry point ahead of a rich catalyst path and upgrade to OW with a $18 price target (25% upside). If EDGE or Woodwork can become a meaningful win for the brand, we believe our $29 bull case valuation could be in play (~100% upside).

Grindr has strong network effects among its 15M users, reaching 60% global brand awareness despite marketing spend at <4% of revenue. Users are highly engaged with DAUs spending >65 minutes on the app daily. That has translated to consistent >40% EBITDA margins. For a sense of its ubiquity, about half of gay relationships in the US start on GRND. It also plays in a higher income and more retentive segment than online dating brands like Tinder or Bumble. Despite its advantages, the app monetizes ~30% below other dating apps - a gap which we believe can close as GRND expands its product suite.”

For an analyst ratings summary and ratings history on Grindr click here. For more ratings news on Grindr click here.

Shares of Grindr closed at $14.37 yesterday.

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