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 Pinterest (NYSE:PINS) 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 6 social networking stocks we track reported a very strong Q3. As a group, revenues beat analysts’ consensus estimates by 2.9% while next quarter’s revenue guidance was 2.4% above.
In light of this news, share prices of the companies have held steady as they are up 3.7% on average since the latest earnings results.
Weakest Q3: 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 $898.4 million, up 17.7% year on year. This print was in line with analysts’ expectations, but overall, it was a mixed quarter for the company with a solid beat of analysts’ EBITDA estimates but revenue guidance for next quarter slightly missing analysts’ expectations.
"We delivered another strong quarter with users reaching another all-time high of 537 million and revenue growth at 18%,” said Bill Ready, CEO of Pinterest.
Unsurprisingly, the stock is down 16.4% since reporting and currently trades at $28.37.
Is now the time to buy Pinterest? Access our full analysis of the earnings results here, it’s free.
Best Q3: 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 $348.4 million, up 67.9% year on year, outperforming analysts’ expectations by 10.6%. The business had an exceptional quarter with EBITDA guidance for next quarter exceeding analysts’ expectations.
Reddit scored the biggest analyst estimates beat and fastest revenue growth among its peers. The company reported 48.2 million daily active users, up 50.6% year on year. The market seems happy with the results as the stock is up 56.2% since reporting. It currently trades at $127.70.
Is now the time to buy Reddit? 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 $40.59 billion, up 18.9% year on year, in line with analysts’ expectations. Still, it was a a satisfactory quarter as it posted a solid beat of analysts’ EBITDA estimates.
As expected, the stock is down 3.4% since the results and currently trades at $572.12.
Read our full analysis of Meta’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 $360.3 million, up 4.4% year on year. This result met analysts’ expectations. It was an exceptional quarter as it also produced a solid beat of analysts’ EBITDA estimates.
The stock is down 1.1% since reporting and currently trades at $35.95.
Read our full, actionable report on Yelp 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 $65.61 million, up 17% year on year. This print surpassed analysts’ expectations by 5.1%. It was a very strong quarter as it also logged EBITDA guidance for next quarter exceeding analysts’ expectations.
The company reported 45.9 million monthly active users, up 13.6% year on year. The stock is down 8.5% since reporting and currently trades at $2.37.
Read our full, actionable report on Nextdoor here, it’s free.
Market Update
Thanks to the Fed's series of rate hikes in 2022 and 2023, inflation has cooled significantly from its post-pandemic highs, drawing closer to the 2% goal. This disinflation has occurred without severely impacting economic growth, suggesting the success of a soft landing. The stock market has thrived in 2024, spurred by recent rate cuts (0.5% in September and 0.25% in November), and a notable surge followed Donald Trump’s presidential election win in November, propelling indices to historic highs. Nonetheless, the outlook for 2025 remains clouded by potential trade policy changes and corporate tax discussions, which could impact business confidence and growth. The path forward holds both optimism and caution as new policies take shape.
Want to invest in winners with rock-solid fundamentals? Check out our Top 5 Growth Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.
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