As the Q2 earnings season wraps, let’s dig into this quarter’s best and worst performers in the social networking industry, including 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 satisfactory Q2. As a group, revenues beat analysts’ consensus estimates by 5.4% while next quarter’s revenue guidance was 0.9% below.
In light of this news, share prices of the companies have held steady as they are up 3.5% 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 $998.2 million, up 16.9% year on year. This print exceeded analysts’ expectations by 2.2%. Overall, it was a satisfactory quarter for the company with a solid beat of analysts’ EBITDA estimates but revenue guidance for next quarter meeting analysts’ expectations.
“I’m proud of our Q2 results—delivering 17% revenue growth and another quarter of record users. We’re also excited that Gen Z has grown to over half of our user base,” said Bill Ready, CEO of Pinterest.
Unsurprisingly, the stock is down 8.5% since reporting and currently trades at $35.87.
Is now the time to buy Pinterest? Access our full analysis of the earnings results here, it’s free.
Best Q2: 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 $499.6 million, up 77.7% year on year, outperforming analysts’ expectations by 17.2%. The business had a very strong quarter with 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 50.3 million daily active users, up 10.5% year on year. The market seems happy with the results as the stock is up 46.2% since reporting. It currently trades at $235.50.
Is now the time to buy Reddit? 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 $1.34 billion, up 8.7% year on year, in line with analysts’ expectations. It was a slower quarter as it posted a significant miss of analysts’ EBITDA estimates.
Snap delivered the weakest performance against analyst estimates in the group. The company reported 469 million daily active users, up 8.6% year on year. As expected, the stock is down 22.1% since the results and currently trades at $7.31.
Read our full analysis of Snap’s results here.
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 $65.09 million, up 2.8% year on year. This number topped analysts’ expectations by 6.1%. More broadly, it was a satisfactory quarter as it also logged a solid beat of analysts’ EBITDA estimates but a slight miss of analysts’ number of weekly active users estimates.
Nextdoor had the slowest revenue growth among its peers. The company reported 45.71 million monthly active users, up 1.4% year on year. The stock is flat since reporting and currently trades at $1.89.
Read our full, actionable report on Nextdoor 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 $47.52 billion, up 21.6% year on year. This result beat analysts’ expectations by 6%. Taking a step back, it was a satisfactory quarter as it also produced a solid beat of analysts’ EBITDA estimates but revenue guidance for next quarter meeting analysts’ expectations.
The company reported 3.48 billion daily active users, up 6.4% year on year. The stock is up 12.4% since reporting and currently trades at $781.28.
Read our full, actionable report on Meta here, it’s free.
Market Update
Thanks to the Fed’s rate hikes in 2022 and 2023, inflation has been on a steady path downward, easing back toward that 2% sweet spot. Fortunately (miraculously to some), all this tightening didn’t send the economy tumbling into a recession, so here we are, cautiously celebrating a soft landing. The cherry on top? Recent rate cuts (half a point in September 2024, a quarter in November) have propped up markets, especially after Trump’s November win lit a fire under major indices and sent them to all-time highs. However, there’s still plenty to ponder — tariffs, corporate tax cuts, and what 2025 might hold for the economy.
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.
StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.
