Looking back on social networking stocks' Q3 earnings, we examine this quarter's best and worst performers, 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 4 social networking stocks we track reported a mixed Q3; on average, revenues beat analyst consensus estimates by 2.8% while next quarter's revenue guidance was in line with consensus. Valuation multiples for growth stocks have reverted to their historical means after reaching highs in early 2021, but social networking stocks held their ground better than others, with the share prices up 32.7% on average since the previous earnings results.
Weakest Q3: 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 $56.09 million, up 4% year on year, falling short of analyst expectations by 0.4%. It was a weak quarter for the company, with slow revenue growth and a miss of analysts' revenue estimates.
Nextdoor delivered the weakest performance against analyst estimates and slowest revenue growth of the whole group. The company reported 40.4 million daily active users, up 5.5% year on year. The stock is down 13.7% since the results and currently trades at $1.57.
Read our full report on Nextdoor here, it's free.
Best Q3: 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 $1.19 billion, up 5.3% year on year, outperforming analyst expectations by 7%. It was a strong quarter for the company, with a decent beat of analysts' revenue estimates and solid growth in its user base.
Snap delivered the biggest analyst estimates beat among its peers. The company reported 406 million daily active users, up 11.8% year on year. The stock is up 67.7% since the results and currently trades at $16.28.
Is now the time to buy Snap? 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 Facebook Reality Labs.
Meta reported revenues of $34.15 billion, up 23.2% year on year, exceeding analyst expectations by 2%. It was a mixed quarter for the company, with underwhelming revenue guidance for the next quarter. On the other hand, Meta beat analysts' revenue and EPS estimates this quarter, driven by better-than-expected monthly active user growth.
Meta pulled off the fastest revenue growth in the group. The company reported 3.96 billion monthly active users, up 6.7% year on year. The stock is up 31% since the results and currently trades at $392.5.
Read our full analysis of Meta'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 $763.2 million, up 11.5% year on year, surpassing analyst expectations by 2.7%. It was a mixed quarter for the company, with a decent beat of analysts' revenue estimates but slow revenue growth.
The company reported 482 million monthly active users, up 8.3% year on year. The stock is up 46% since the results and currently trades at $36.59.
Read our full, actionable report on Pinterest here, it's free.
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The author has no position in any of the stocks mentioned