Looking back on social networking stocks' Q1 earnings, we examine this quarter's best and worst performers, including Meta (NASDAQ:META) 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 4 social networking stocks we track reported a mixed Q1; on average, revenues beat analyst consensus estimates by 2.85%, while on average next quarter revenue guidance was 3.76% above consensus. Tech multiples have reverted to the historical mean after reaching all time levels in early 2021, but social networking stocks held their ground better than others, with the share prices up 1.58% since the previous earnings results, on average.
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 Facebook Reality Labs.
Meta reported revenues of $28.6 billion, up 2.64% year on year, beating analyst expectations by 3.57%. It was a decent quarter for the company, with a very optimistic guidance for the next quarter but slow revenue growth.
"We had a good quarter and our community continues to grow," said Mark Zuckerberg, Meta founder and CEO.
The stock is up 18.5% since the results and currently trades at $247.98.
Is now the time to buy Meta? Access our full analysis of the earnings results here, it's free.
Best Q1: 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 $49.8 million, down 2.41% year on year, beating analyst expectations by 8.34%. It was a strong quarter for the company, with an impressive beat of analyst estimates and a very optimistic guidance for the next quarter.
Nextdoor achieved the strongest analyst estimates beat among its peers. The company reported 42.4 million daily active users, up 15.5% year on year. The stock is up 9.36% since the results and currently trades at $2.22.
Is now the time to buy Nextdoor? Access our full analysis of the earnings results here, it's free.
Weakest Q1: 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 $988.6 million, down 6.97% year on year, missing analyst expectations by 2.19%. It was a weak quarter for the company, with declining revenue and a miss of the top line analyst estimates.
Snap had the weakest performance against analyst estimates and slowest revenue growth in the group. The company reported 383 million daily active users, up 15.4% year on year. The stock is down 6.78% since the results and currently trades at $9.76.
Created with the idea of virtually replacing paper catalogues, Pinterest (NYSE: PINS) is an online image and social discovery platform.
Pinterest reported revenues of $602.6 million, up 4.82% year on year, beating analyst expectations by 1.68%. It was a mixed quarter for the company, with a beat of topline estimates but slow revenue growth and declining gross margin.
Pinterest scored the fastest revenue growth among the peers. The company reported 463 million monthly active users, up 6.93% year on year. The stock is down 14.8% since the results and currently trades at $23.22.
The author has no position in any of the stocks mentioned