Earnings results often indicate what direction a company will take in the months ahead. With Q1 behind us, let’s have a look at Pinterest (NYSE:PINS) and its peers.
Businesses must meet their customers where they are, which over the past decade has come to mean on social networks. In 2020, users spent over 2.5 hours a day on social networks, a figure that has increased every year since measurement began. As a result, businesses continue to shift their advertising and marketing dollars online.
The 6 social networking stocks we track reported a strong Q1. As a group, revenues beat analysts’ consensus estimates by 2.4% while next quarter’s revenue guidance was 1.2% below.
Luckily, social networking stocks have performed well with share prices up 21.1% on average since the latest earnings results.
Slowest Q1: Pinterest (NYSE:PINS)
Created with the idea of virtually replacing paper catalogues, Pinterest (NYSE: PINS) is an online image and social discovery platform.
Pinterest reported revenues of $855 million, up 15.5% year on year. This print exceeded analysts’ expectations by 1%. Despite the top-line beat, it was still a mixed quarter for the company with a solid beat of analysts’ EBITDA estimates but revenue guidance for next quarter slightly missing analysts’ expectations.
Pinterest delivered the weakest performance against analyst estimates of the whole group. The company reported 570 million monthly active users, up 10% year on year. Interestingly, the stock is up 36.8% since reporting and currently trades at $38.14.
Is now the time to buy Pinterest? Access our full analysis of the earnings results here, it’s free.
Best Q1: Nextdoor (NYSE:KIND)
Helping residents figure out what's happening on their block in real time, Nextdoor (NYSE:KIND) is a social network that connects neighbors with each other and with local businesses.
Nextdoor reported revenues of $54.18 million, up 1.9% year on year, outperforming analysts’ expectations by 1.8%. The business had a very strong quarter with an impressive beat of analysts’ EBITDA estimates and a solid beat of analysts’ number of weekly active users estimates.
The market seems happy with the results as the stock is up 25.2% since reporting. It currently trades at $1.89.
Is now the time to buy Nextdoor? Access our full analysis of the earnings results here, it’s free.
Meta (NASDAQ:META)
Famously founded by Mark Zuckerberg in his Harvard dorm, Meta Platforms (NASDAQ:META) operates a collection of the largest social networks in the world - Facebook, Instagram, WhatsApp, and Messenger, along with its metaverse focused Reality Labs.
Meta reported revenues of $42.31 billion, up 16.1% year on year, exceeding analysts’ expectations by 2.3%. Still, it was a mixed quarter as it posted revenue guidance for next quarter missing analysts’ expectations significantly.
Interestingly, the stock is up 30.6% since the results and currently trades at $714.88.
Read our full analysis of Meta’s results here.
Reddit (NYSE:RDDT)
Founded in 2005 by two University of Virginia roommates, Reddit (NYSE:RDDT) facilitates user-generated content across niche communities (called subreddits) that discuss anything from stocks to dating and memes.
Reddit reported revenues of $392.4 million, up 61.5% year on year. This result beat analysts’ expectations by 6.2%. Overall, it was a strong quarter as it also put up EBITDA guidance for next quarter exceeding analysts’ expectations and an impressive beat of analysts’ EBITDA estimates.
Reddit pulled off the biggest analyst estimates beat and fastest revenue growth among its peers. The company reported 50.1 million daily active users, up 20.7% year on year. The stock is up 24.2% since reporting and currently trades at $147.39.
Read our full, actionable report on Reddit here, it’s free.
Snap (NYSE:SNAP)
Founded by Stanford University students Evan Spiegel, Reggie Brown, and Bobby Murphy, and originally called Picaboo, Snapchat (NYSE: SNAP) is an image centric social media network.
Snap reported revenues of $1.36 billion, up 14.1% year on year. This print surpassed analysts’ expectations by 1.3%. It was a strong quarter as it also produced an impressive beat of analysts’ EBITDA estimates and solid growth in its users.
The company reported 460 million daily active users, up 9% year on year. The stock is up 11.1% since reporting and currently trades at $10.11.
Read our full, actionable report on Snap here, it’s free.
Market Update
In response to the Fed’s rate hikes in 2022 and 2023, inflation has been gradually trending down from its post-pandemic peak, trending closer to the Fed’s 2% target. Despite higher borrowing costs, the economy has avoided flashing recessionary signals. This is the much-desired soft landing that many investors hoped for. The recent rate cuts (0.5% in September and 0.25% in November 2024) have bolstered the stock market, making 2024 a strong year for equities. Donald Trump’s presidential win in November sparked additional market gains, sending indices to record highs in the days following his victory. However, debates continue over possible tariffs and corporate tax adjustments, raising questions about economic stability in 2025.
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