Let’s dig into the relative performance of Yelp (NYSE:YELP) and its peers as we unravel the now-completed Q2 social networking earnings season.
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.
Inflation progressed towards the Fed’s 2% goal at the end of 2023, leading to strong stock market performance. On the other hand, 2024 has been a bumpier ride as the market switches between optimism and pessimism around rate cuts and inflation, and social networking stocks have had a rough stretch. On average, share prices are down 8% since the latest earnings results.
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 exceeded analysts’ expectations by 1.1%. Despite the top-line beat, it was still a weaker quarter for the company with slow revenue growth.
“Yelp delivered strong profitability and record net revenue in the second quarter,” said Jeremy Stoppelman, Yelp’s co-founder and chief executive officer.
Yelp delivered the slowest revenue growth of the whole group. Interestingly, the stock is up 2.8% since reporting and currently trades at $34.43.
Is now the time to buy Yelp? Access our full analysis of the earnings results here, it’s free.
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, outperforming analysts’ expectations by 8.5%. The business had a strong quarter with optimistic revenue guidance for the next quarter and a decent beat of analysts’ user estimates.
Nextdoor pulled off the biggest analyst estimates beat among its peers. The company reported 45.13 million monthly active users, up 8.5% year on year. Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 5.6% since reporting. It currently trades at $2.37.
Is now the time to buy Nextdoor? 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 25.4% since the results and currently trades at $9.55.
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 print met analysts’ expectations. Zooming out, it was a slower quarter as it logged 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 22.5% since reporting and currently trades at $28.94.
Read our full, actionable report on Pinterest 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. This result surpassed analysts’ expectations by 2%. Overall, it was a satisfactory quarter as it also produced strong sales guidance for the next quarter.
Meta delivered the fastest revenue growth among its peers. The company reported 3.27 billion daily active users, up 6.5% year on year. The stock is up 10.9% since reporting and currently trades at $526.08.
Read our full, actionable report on Meta here, it’s free.
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