Wrapping up Q2 earnings, we look at the numbers and key takeaways for the social networking stocks, including Nextdoor (NYSE:KIND) 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 5 social networking stocks we track reported a mixed Q2. As a group, revenues beat analysts’ consensus estimates by 2.2% while next quarter’s revenue guidance was 0.9% above.
The Fed cut its policy rate by 50bps (half a percent) in September 2024, the first in roughly four years. This marks the end of its most pointed inflation-busting campaign since the 1980s. While CPI (inflation) readings have been supportive lately, employment measures have bordered on worrisome. The markets will be assessing whether this rate cut’s timing (and more potential ones in 2024 and 2025) is ideal for supporting the economy or a bit too late for a macro that has already cooled too much.
While some social networking stocks have fared somewhat better than others, they have collectively declined. On average, share prices are down 1.5% since the latest earnings results.
Best Q2: 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 $63.29 million, up 11.3% year on year. This print exceeded analysts’ expectations by 8.5%. Overall, it was a strong quarter for the company with optimistic revenue guidance for the next quarter and a decent beat of analysts’ user estimates.
Nextdoor pulled off the biggest analyst estimates beat of the whole group. The company reported 45.13 million monthly active users, up 8.4% year on year. The results were likely priced in, however, and the stock is flat since reporting. It currently trades at $2.50.
Is now the time to buy Nextdoor? 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 $39.07 billion, up 22.1% year on year, outperforming analysts’ expectations by 2%. The business had a satisfactory quarter with strong sales guidance for the next quarter.
Meta scored the fastest revenue growth among its peers. The company reported 3.27 billion daily active users, up 6.5% year on year. The market seems happy with the results as the stock is up 21.6% since reporting. It currently trades at $577.
Is now the time to buy Meta? 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 $1.24 billion, up 15.8% year on year, falling short of analysts’ expectations by 1.1%. It was a weaker quarter as it posted underwhelming revenue guidance for the next quarter and slow revenue growth.
Snap delivered the weakest performance against analyst estimates in the group. The company reported 432 million daily active users, up 8.8% year on year. As expected, the stock is down 16% since the results and currently trades at $10.76.
Read our full analysis of Snap’s results here.
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 $853.7 million, up 20.6% year on year. This result was in line with analysts’ expectations. Zooming out, it was a strong quarter as it recorded underwhelming revenue guidance for the next quarter and a miss of analysts’ user estimates.
The company reported 522 million monthly active users, up 12.3% year on year. The stock is down 13.1% since reporting and currently trades at $32.47.
Read our full, actionable report on Pinterest here, it’s free.
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 $357 million, up 5.9% year on year. This print surpassed analysts’ expectations by 1.1%. Aside from that, it was a weaker quarter as it logged slow revenue growth.
Yelp had the slowest revenue growth among its peers. The stock is flat since reporting and currently trades at $33.52.
Read our full, actionable report on Yelp here, it’s free.
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