Over the years, social media has turned from an internet curiosity to a marketing powerhouse. It gave businesses of various sizes an avenue to reach a wider audience and effectively market products. It created a social economy where even personalities or products become overnight successes. Large companies have taken advantage of this arrangement; some have even launched successful viral social media campaigns. Industry experts expect the social media market to grow to $434.87 billion by 2027 at a CAGR of 17.1%—good news for investors looking for social media stocks.
With such optimistic growth expectations, it is no wonder new apps and sites always pop up as the new “Facebook Killer” or “Instagram Killer” to spice up the competition and take a piece of the market share. Companies are adopting aggressive expansion strategies, facilitating growth and increased competition. This gives investors a chance to join in on their growth trajectories. So, if you want to jump into the social media train, here are three (other than META) companies you can start with now.
Yelp Inc. (YELP)
The first company, Yelp Inc. (NYSE:YELP), is an online platform that allows businesses and consumers to connect through its website, yelp.com. The company provides its users access to a crowd-sourced local business review, a social networking site, and the ability to communicate through an online community of potential customers and businesses. YELP also offers advertising products for businesses of different sizes, ranging from free to paid advertising packages. Subscription services and licensing payments for its data are also a part of its offerings.
The company’s latest financial showcased some record numbers. Net revenue increased by 12%, while adjusted EBITDA grew by 30% YoY. Most impressive of all is the 539% increase in net income. Its success came from the service category’s advertising revenue, which gave a 25% boost in its self-serve channel and 9% ad clicks on a YoY basis. The company’s focus on improving user experience through product enhancement has made it a go-to service advertising platform.
In addition, YELP has maintained double-digit revenue growth for the last ten quarters, emphasizing its strong growth momentum. This excellent financial performance and record-breaking numbers put YELP at the top of our social media stocks to buy.
Pinterest, Inc. (PINS)
Pinterest, Inc. (NYSE:PINS) is a visual discovery engine company known for its platform, pinterest.com. The website lets users discover and personalize their visual content with its Pins feature. Pins are the product of Pinners, creators, and businesses. These static images link to content from various websites that allow viewers to see highlighted recipes, styles, products, DIY, and home inspirations. The company also offers Product Pins that include catalog and inventory items that users can purchase based on availability. In addition, Video Pins offers short videos from businesses linking to various topics.
Pinterest’s quarterly results presented a solid growth and margin expansion for the company. Revenue grew by 11% YoY, while global monthly active users increased to 482 million. Earnings also breached positive territory in the red after two consecutive quarters, with EPS ending at $0.03 and exceeding expectations by 200%. Its focus on visual searches and shopping led to higher user engagement and better advertiser results, which led to a 24% increase in adjusted EBITDA margin. Along with current positive numbers, the company expects an 11-13% revenue growth in the following quarter. Additionally, analysts give the company a “Strong Buy” recommendation. Consistent top-line growth and user expansion make PINS one of the more attractive social media stocks to buy now.
JOYY Inc. (YY)
JOYY Inc. (NASDAQ:YY) is a technology company that operates various social media products like Bigo Live for live streaming, Hago for multiplayer social networking (instant messaging and other features), and Likee for short-form videos. Its operations fall under two main segments: BIGO for its social entertainment platforms, All others for its audio live streaming, Hago, and Shopline. Its main strength lies in its media platforms for live streaming, e-commerce, education, and web financial solutions.
JOYY’s latest financials saw a marginal decline in its net revenues by 3.3% on a YoY basis. However, the company experienced a 14.0% surge in Bigo Live mobile users, reaching 40.3 million. The platform also saw a 6.6% increase in paying customers. The latest EPS reached $1.15, outstripping the $0.84 consensus estimate by 36.9%. YY expects Q4 net revenues to end between $551 million and $579 million. The company has an existing share repurchase program, highlighting its focus on shareholder returns. Despite slight income fluctuations, its increasing user base and paying users show the business’s resiliency and potential for further growth.
On the date of publication, Rick Orford did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
