Earnings results often indicate what direction a company will take in the months ahead. With Q3 behind us, let’s have a look at Snap (NYSE:SNAP) 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 very strong Q3. As a group, revenues beat analysts’ consensus estimates by 2.9% while next quarter’s revenue guidance was 2.4% above.
Luckily, social networking stocks have performed well with share prices up 17.3% on average since the latest earnings results.
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 $1.37 billion, up 15.5% year on year. This print exceeded analysts’ expectations by 1.1%. Overall, it was a strong quarter for the company with an impressive beat of analysts’ EBITDA estimates and solid growth in its users.
“I’m proud of the team’s progress this quarter, delivering strong community growth and deepening engagement while driving improved financial performance,” said Evan Spiegel, CEO.
Interestingly, the stock is up 14% since reporting and currently trades at $12.43.
Is now the time to buy Snap? 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 pulled off 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 101% since reporting. It currently trades at $164.58.
Is now the time to buy Reddit? Access our full analysis of the earnings results here, it’s free.
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, in line with analysts’ expectations. It was a mixed quarter as it posted an impressive beat of analysts’ EBITDA estimates but revenue guidance for next quarter slightly missing analysts’ expectations.
As expected, the stock is down 11.5% since the results and currently trades at $30.02.
Read our full analysis of Pinterest’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 $65.61 million, up 17% year on year. This print surpassed analysts’ expectations by 5.1%. It was a very strong quarter as it also put up 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 9.2% since reporting and currently trades at $2.35.
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 $40.59 billion, up 18.9% year on year. This number was in line with analysts’ expectations. Zooming out, it was a satisfactory quarter as it also produced an impressive beat of analysts’ EBITDA estimates but number of daily active people in line with analysts’ estimates.
The company reported 3.29 billion daily active users, up 4.8% year on year. The stock is up 2.8% since reporting and currently trades at $608.80.
Read our full, actionable report on Meta 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% each in November and December), 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 the pace and magnitude of future rate cuts as well as potential changes in trade policy and corporate taxes once the Trump administration takes over. The path forward is marked by uncertainty.
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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