Grindr (GRND) posted strong Q2 results with a "tidy" beat and raise, with the company showing progress on its free user product as well as improvements in its casual product Right Now, Morgan Stanley said in a note Friday.

The Q2 results were "well-rounded with a 4% beat" on revenue and EBITDA, the note said, adding Grindr "flowed through that upside" with its 2026 revenue and EBITDA growth outlook now lifted about 120 basis points and roughly 280 basis points, respectively.

The quarterly results showed "strong execution balanced with long-term investments to set-up growth from here," the note said.

Meanwhile, the investments that Grindr has made in AI are "also starting to pay off" as engineering output has increased about 2.5 times over the past three quarters.

Morgan Stanley has an overweight rating on Grindr and raised the company's price target to $20 from $18.

Price: 16.57, Change: -0.58, Percent Change: -3.38