Quarterly earnings results are a good time to check in on a company’s progress, especially compared to its peers in the same sector. Today we are looking at Snap (NYSE:SNAP) and the best and worst performers in the social networking industry.
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 an ok Q1; on average, revenues beat analyst consensus estimates by 3.5%. while next quarter’s revenue guidance was 1.3% above consensus. Stocks, especially growth stocks where cash flows further in the future are more important to the story, had a good end of 2023. But the beginning of 2024 has seen more volatile stock performance due to mixed inflation data, but social networking stocks have exhibited impressive performance, with the share prices up 13.6% on average since the previous earnings results.
Best Q1: 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 $1.19 billion, up 20.9% year on year, topping analysts’ expectations by 6.6%. It was an impressive quarter for the company, with strong sales guidance for the next quarter and solid growth in its users.
“The value we provide our community and advertising partners has translated into improved financial performance,” said Evan Spiegel, CEO.
Snap pulled off the biggest analyst estimates beat of the whole group. The company reported 422 million daily active users, up 10.2% year on year. The stock is up 34.6% since the results and currently trades at $15.35.
Is now the time to buy Snap? Access our full analysis of the earnings results here, it’s free.
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 $740 million, up 22.8% year on year, outperforming analysts’ expectations by 5.7%. It was a very good quarter for the company, with strong sales guidance for the next quarter and solid growth in its users.
The stock is up 31.4% since the results and currently trades at $43.98.
Is now the time to buy Pinterest? Access our full analysis of the earnings results here, it’s free.
Weakest Q1: 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 $332.8 million, up 6.5% year on year, falling short of analysts’ expectations by 0.2%. It was a mixed quarter for the company: Yelp’s revenue growth regrettably slowed and its revenue missed Wall Street’s estimates. On the other hand, adjusted EBITDA came in ahead.
Yelp had the weakest performance against analyst estimates and slowest revenue growth in the group. The stock is down 9.2% since the results and currently trades at $36.
Read our full analysis of Yelp’s results here.
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 $36.46 billion, up 27.3% year on year, in line with analysts’ expectations. It was a weak quarter for the company, with underwhelming revenue guidance for the next quarter.
Meta achieved the fastest revenue growth among its peers. The stock is up 1.5% since the results and currently trades at $501.24.
Read our full, actionable report on Meta here, it’s free.
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 $53.15 million, up 6.8% year on year, surpassing analysts’ expectations by 4.6%. It was a decent quarter for the company, with optimistic revenue guidance for the next quarter but slow revenue growth.
The company reported 43.4 million monthly active users, up 2.4% year on year. The stock is up 9.5% since the results and currently trades at $2.47.
Read our full, actionable report on Nextdoor here, it’s free.
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