Grindr upgraded on premium tier and telehealth growth potential

Investing.com -- Morgan Stanley upgraded Grindr to Overweight from Equal-weight and raised its price target to $18 from $15, arguing the company's upcoming ultra-premium subscription tier and telehealth expansion could unlock a new phase of growth after the stock's sharp decline over the past year.

The brokerage said Grindr's shares have fallen about 36% over the last 12 months amid concerns that aggressive paywall-driven monetization was hurting user growth. However, analysts now see a more sustainable, product-led strategy emerging through two new initiatives: EDGE, an AI-powered premium subscription offering, and Woodwork, a direct-to-consumer telehealth business.

Morgan Stanley described Grindr as a "one-of-one" asset with roughly 15 million monthly active users, strong network effects, industry-leading engagement exceeding 65 minutes per daily active user, and EBITDA margins above 40%. Despite those strengths, the firm estimates the platform monetizes roughly 30% below comparable dating apps, leaving significant room for improvement.

A key part of the bullish thesis is the planned launch of EDGE in late 2026 or early 2027. The new tier, aimed at affluent power users, will offer AI-powered profile recommendations, conversation insights and enhanced discovery tools. Following stronger-than-expected demand during testing in Australia at around $80 per month, Grindr is now evaluating pricing between $100 and $500 per month. Morgan Stanley estimates EDGE could generate $78 million in revenue by 2028 in its base case.

The bank also highlighted Woodwork, Grindr's telehealth brand offering erectile dysfunction treatments, GLP-1 weight-loss medications and peptides. Analysts believe the service could tap into a large existing user base, noting that around 30% of Grindr users already use ED medication while another 60% have considered it. Morgan Stanley projects Woodwork could contribute $28 million in revenue by 2028, with upside if adoption accelerates.

Combining the two initiatives, Morgan Stanley now forecasts revenue growth of 23% in 2026 and 17% in 2027, with EDGE and Woodwork accounting for roughly 60% of revenue growth through 2028. The firm expects Grindr's revenue to expand at an 18% compound annual growth rate between 2025 and 2028.

Morgan Stanley said the stock's valuation remains attractive, trading at about 11 times 2027 EBITDA, a roughly 35% discount to peers on a growth-adjusted basis. The bank's $18 price target implies about 25% upside from current levels, while its bull-case valuation of $29 suggests potential upside of more than 100% if both EDGE and Woodwork achieve strong adoption.

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Key risks include rising competition, weaker-than-expected uptake of the new products, and a failure to sustain a pattern of earnings beats and guidance increases, Morgan Stanley said.

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