As we reflect back on the just completed Q2 social networking sector earnings season, we dig into the relative performance of Pinterest (NYSE:PINS) 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 weak Q2; on average, revenues missed analyst consensus estimates by 3.64%, while on average next quarter revenue guidance was 10.3% under 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 share price down 2.34% since the previous earnings results, on average.
Created with the idea of virtually replacing paper catalogues, Pinterest (NYSE: PINS) is an online image and social discovery platform.
Pinterest reported revenues of $665.9 million, up 8.59% year on year, in line with analyst estimates. Despite the stock soaring on the results, it was a weak quarter for the company, with declining number of users and a slow revenue growth.
“Pinterest achieved 9% revenue growth year over year in Q2, or 10% revenue growth on a constant currency basis, despite the uncertainty facing our advertisers,” said Bill Ready, CEO, Pinterest.
Pinterest achieved the strongest analyst estimates beat of the whole group. The company reported 433 million monthly active users, down 4.63% year on year. The stock is up 24.5% since the results and currently trades at $24.76.
Is now the time to buy Pinterest? Access our full analysis of the earnings results here, it's free.
Best 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 $1.11 billion, up 13.1% year on year, missing analyst expectations by 2.07%. It was a weak quarter for the company, with a miss of the top line analyst estimates and a slow revenue growth.
Snap delivered the fastest revenue growth among its peers. The company reported 347 million daily active users, up 18.4% year on year. The stock is down 29.4% since the results and currently trades at $11.56.
Is now the time to buy Snap? Access our full analysis of the earnings results here, it's free.
Weakest Q2: 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 $28.8 billion, down 0.88% year on year, missing analyst expectations by 0.44%. It was a weak quarter for the company, with a slow revenue growth and an underwhelming revenue guidance for the next quarter.
The company reported 3.65 billion monthly active people, up 3.98% year on year. The stock is down 10.4% since the results and currently trades at $151.64.
Born out of a failed podcasting startup, Twitter (NYSE: TWTR) is the town square of the internet, one part social network, one part media distribution platform.
Twitter reported revenues of $1.17 billion, down 1.16% year on year, missing analyst expectations by 11.9%. It was a weak quarter for the company, with a slow revenue growth and a miss of the top line analyst estimates.
Twitter had the weakest performance against analyst estimates and slowest revenue growth among the peers. The company reported 237.8 million daily active users, up 15.4% year on year. The stock is up 5.92% since the results and currently trades at $41.90.
Twitter has previously entered into a definitive agreement to be acquired by Elon Musk, for $54.20 per share in cash in a transaction valued at approximately $44 billion
The author has no position in any of the stocks mentioned