As the Q1 earnings season wraps, let’s dig into this quarter’s best and worst performers in the social networking industry, 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 6 social networking stocks we track reported a strong Q1. As a group, revenues beat analysts’ consensus estimates by 2.4% while next quarter’s revenue guidance was 0.9% below.
Thankfully, share prices of the companies have been resilient as they are up 9.7% on average since the latest earnings results.
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 $54.18 million, up 1.9% year on year. This print exceeded analysts’ expectations by 1.8%. Overall, it was a very strong quarter for the company with an impressive beat of analysts’ EBITDA estimates and a solid beat of analysts’ number of weekly active users estimates.
"In Q1 we continued to add new users, improved margins, and generated positive operating cash flow — though our most significant progress during Q1 was product-related," said Nextdoor CEO Nirav Tolia.
Nextdoor delivered the slowest revenue growth of the whole group. The company reported 46.1 million monthly active users, up 6.2% year on year. Interestingly, the stock is up 7.3% since reporting and currently trades at $1.62.
Is now the time to buy Nextdoor? Access our full analysis of the earnings results here, it’s free.
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 $1.36 billion, up 14.1% year on year, outperforming analysts’ expectations by 1.3%. The business had a strong quarter with a solid beat of analysts’ EBITDA estimates.
The market seems unhappy with the results as the stock is down 10.4% since reporting. It currently trades at $8.15.
Is now the time to buy Snap? Access our full analysis of the earnings results 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 $855 million, up 15.5% year on year, exceeding analysts’ expectations by 1%. Still, it was a mixed quarter as it posted revenue guidance for next quarter meeting analysts’ expectations.
Pinterest delivered the weakest performance against analyst estimates in the group. The company reported 570 million monthly active users, up 10% year on year. Interestingly, the stock is up 23.9% since the results and currently trades at $34.53.
Read our full analysis of Pinterest’s results here.
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 $392.4 million, up 61.5% year on year. This number surpassed analysts’ expectations by 6.2%. Overall, it was a strong quarter as it also logged EBITDA guidance for next quarter exceeding analysts’ expectations.
Reddit delivered the biggest analyst estimates beat and fastest revenue growth among its peers. The company reported 50.1 million daily active users, up 20.7% year on year. The stock is up 11.7% since reporting and currently trades at $132.60.
Read our full, actionable report on Reddit here, it’s free.
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 $358.5 million, up 7.7% year on year. This result topped analysts’ expectations by 1.8%. It was a strong quarter as it also produced an impressive beat of analysts’ EBITDA estimates and full-year revenue guidance meeting analysts’ expectations.
The stock is flat since reporting and currently trades at $35.41.
Read our full, actionable report on Yelp here, it’s free.
Market Update
In response to the Fed’s rate hikes in 2022 and 2023, inflation has been gradually trending down from its post-pandemic peak, trending closer to the Fed’s 2% target. Despite higher borrowing costs, the economy has avoided flashing recessionary signals. This is the much-desired soft landing that many investors hoped for. The recent rate cuts (0.5% in September and 0.25% in November 2024) have bolstered the stock market, making 2024 a strong year for equities. Donald Trump’s presidential win in November sparked additional market gains, sending indices to record highs in the days following his victory. However, debates continue over possible tariffs and corporate tax adjustments, raising questions about economic stability in 2025.
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