Social Networking Stocks Q2 Recap: Benchmarking Pinterest (NYSE:PINS)
Earnings results often indicate what direction a company will take in the months ahead. With Q2 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 5 social networking stocks we track reported a mixed Q2. As a group, revenues beat analysts’ consensus estimates by 2.2% while next quarter’s revenue guidance was 0.9% above.
Inflation progressed towards the Fed's 2% goal recently, leading the Fed to reduce its policy rate by 50bps (half a percent or 0.5%) in September 2024. This is the first cut in four years. While CPI (inflation) readings have been supportive lately, employment measures have bordered on worrisome. The markets will be debating whether this rate cut's timing (and more potential ones in 2024 and 2025) is ideal for supporting the economy or a bit too late for a macro that has already cooled too much.
In light of this news, social networking stocks have held steady with share prices up 1.4% on average since the latest earnings results.
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 $853.7 million, up 20.6% year on year. This print was in line with analysts’ expectations, but overall, it was a slower quarter for the company with underwhelming revenue guidance for the next quarter and a miss of analysts’ user estimates.
“We had another impressive quarter, reporting a 21% increase in revenue and 12% growth in monthly active users globally,” said Bill Ready, CEO of Pinterest.
Unsurprisingly, the stock is down 8.7% since reporting and currently trades at $34.10.
Is now the time to buy Pinterest? Access our full analysis of the earnings results here, it’s free.
Best Q2: 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 $63.29 million, up 11.3% year on year, outperforming analysts’ expectations by 8.5%. The business had a strong quarter with optimistic revenue guidance for the next quarter and a decent beat of analysts’ user estimates.
Nextdoor delivered the biggest analyst estimates beat among its peers. The company reported 45.13 million monthly active users, up 8.4% year on year. The market seems content with the results as the stock is up 1.6% since reporting. It currently trades at $2.55.
Is now the time to buy Nextdoor? Access our full analysis of the earnings results here, it’s free.
Weakest Q2: 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 $1.24 billion, up 15.8% year on year, falling short of analysts’ expectations by 1.1%. It was a weaker quarter as it posted underwhelming revenue guidance for the next quarter and slow revenue growth.
Snap delivered the weakest performance against analyst estimates in the group. The company reported 432 million daily active users, up 8.8% year on year. As expected, the stock is down 13.3% since the results and currently trades at $11.10.
Read our full analysis of Snap’s results here.
Yelp (NYSE:YELP)
Founded by PayPal alumni Jeremy Stoppelman and Russel Simmons, Yelp (NYSE:YELP) is an online platform that helps people discover local businesses through crowd-sourced reviews.
Yelp reported revenues of $357 million, up 5.9% year on year. This result topped analysts’ expectations by 1.1%. Taking a step back, it was a weaker quarter as it logged slow revenue growth.
Yelp had the slowest revenue growth among its peers. The stock is up 2.8% since reporting and currently trades at $34.45.
Read our full, actionable report on Yelp 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 $39.07 billion, up 22.1% year on year. This result beat analysts’ expectations by 2%. It was a satisfactory quarter as it also recorded strong sales guidance for the next quarter.
Meta delivered the fastest revenue growth among its peers. The company reported 3.27 billion daily active users, up 6.5% year on year. The stock is up 24.6% since reporting and currently trades at $591.09.
Read our full, actionable report on Meta here, it’s free.
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