Grindr (GRND) is stepping up efforts to grow revenue per user while modernizing a platform long seen as underinvested, Morgan Stanley said Tuesday in a report initiating coverage of the stock with an equal-weight rating.

The dating and social-connection platform is a "fantastic business" that is "trying to rapidly increase monetization while improving the free user experience, a challenging balance," Morgan Stanley said.

Grindr delivered a 31% revenue compound annual growth rate from 2021 to 2025 alongside 9% annual growth in monthly active users, the report said. Still, user concerns are increasing with 65% of recent one-star reviews citing ads or revenue tactics, up from 13% in 2021, the bank said.

"We believe the company will be able to increase monetization while maintaining the free user experience," the bank added.

Morgan Stanley has a $14 price target on the stock.

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