The end of the earnings season is always a good time to take a step back and see who shined (and who not so much). Let’s take a look at how social networking stocks fared in Q2, starting with Meta (NASDAQ: META).
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 6 social networking stocks we track reported a satisfactory Q2. As a group, revenues beat analysts’ consensus estimates by 5.4% while next quarter’s revenue guidance was 0.9% below.
In light of this news, share prices of the companies have held steady. On average, they are relatively unchanged since the latest earnings results.
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 $47.52 billion, up 21.6% year on year. This print exceeded analysts’ expectations by 6%. Overall, it was a strong quarter for the company with an impressive beat of analysts’ EBITDA estimates and a decent beat of analysts’ number of daily active people estimates.
"We've had a strong quarter both in terms of our business and community," said Mark Zuckerberg, Meta founder and CEO.
Interestingly, the stock is up 7.2% since reporting and currently trades at $745.37.
Read why we think that Meta is one of the best social networking stocks, our full report is free.
Best Q2: Reddit (NYSE: RDDT)
Founded in 2005 by two University of Virginia roommates, Reddit (NYSE: RDDT) facilitates user-generated content across niche communities (called subreddits) that discuss anything from stocks to dating and memes.
Reddit reported revenues of $499.6 million, up 77.7% year on year, outperforming analysts’ expectations by 17.2%. The business had a very strong quarter with EBITDA guidance for next quarter exceeding analysts’ expectations and an impressive beat of analysts’ EBITDA estimates.
Reddit pulled off the biggest analyst estimates beat and fastest revenue growth among its peers. The company reported 50.3 million daily active users, up 10.5% year on year. The market seems happy with the results as the stock is up 30.3% since reporting. It currently trades at $209.88.
Is now the time to buy Reddit? 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 $1.34 billion, up 8.7% year on year, in line with analysts’ expectations. It was a slower quarter as it posted a significant miss of analysts’ EBITDA estimates.
Snap delivered the weakest performance against analyst estimates in the group. The company reported 469 million daily active users, up 8.6% year on year. As expected, the stock is down 25.4% since the results and currently trades at $7.
Read our full analysis of Snap’s results here.
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 $370.4 million, up 3.7% year on year. This number beat analysts’ expectations by 1.4%. Zooming out, it was a mixed quarter as it also produced a solid beat of analysts’ EBITDA estimates but full-year revenue guidance meeting analysts’ expectations.
The stock is down 8.2% since reporting and currently trades at $31.51.
Read our full, actionable report on Yelp here, it’s free.
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 $998.2 million, up 16.9% year on year. This print topped analysts’ expectations by 2.2%. Aside from that, it was a satisfactory quarter as it also recorded an impressive beat of analysts’ EBITDA estimates but revenue guidance for next quarter meeting analysts’ expectations.
The company reported 578 million monthly active users, up 10.7% year on year. The stock is down 7.5% since reporting and currently trades at $36.26.
Read our full, actionable report on Pinterest here, it’s free.
Market Update
Thanks to the Fed’s rate hikes in 2022 and 2023, inflation has been on a steady path downward, easing back toward that 2% sweet spot. Fortunately (miraculously to some), all this tightening didn’t send the economy tumbling into a recession, so here we are, cautiously celebrating a soft landing. The cherry on top? Recent rate cuts (half a point in September 2024, a quarter in November) have propped up markets, especially after Trump’s November win lit a fire under major indices and sent them to all-time highs. However, there’s still plenty to ponder — tariffs, corporate tax cuts, and what 2025 might hold for the economy.
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