Q1 Rundown: Yelp (NYSE:YELP) Vs Other Social Networking Stocks
Earnings results often indicate what direction a company will take in the months ahead. With Q1 now behind us, let’s have a look at Yelp (NYSE:YELP) 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 5 social networking stocks we track reported an ok Q1; on average, revenues beat analyst consensus estimates by 3.5%. while next quarter's revenue guidance was 1.3% above consensus. Stocks, especially growth stocks where cash flows further in the future are more important to the story, had a good end of 2023. But the beginning of 2024 has seen more volatile stock performance due to mixed inflation data, but social networking stocks have shown resilience, with share prices up 9% on average since the previous earnings results.
Weakest Q1: 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 $332.8 million, up 6.5% year on year, in line with analysts' expectations. Overall, it was a weak quarter for the company with slow revenue growth.
“In the first quarter, the strength and momentum in our services categories, particularly home services, offset a challenging environment for our restaurant, retail and other categories,” said Jeremy Stoppelman, Yelp’s co-founder and chief executive officer.
Yelp delivered the weakest performance against analyst estimates and slowest revenue growth of the whole group. The stock is down 8.7% since reporting and currently trades at $36.21.
Is now the time to buy Yelp? Access our full analysis of the earnings results here, it's free.
Best Q1: 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 20.9% year on year, outperforming analysts' expectations by 6.6%. It was an impressive quarter for the company with strong sales guidance for the next quarter and solid growth in its users.
Snap pulled off the biggest analyst estimates beat among its peers. The company reported 422 million daily active users, up 10.2% year on year. The market seems happy with the results as the stock is up 19.6% since reporting. It currently trades at $13.64.
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 Reality Labs.
Meta reported revenues of $36.46 billion, up 27.3% year on year, in line with analysts' expectations. It was a weak quarter for the company with underwhelming revenue guidance for the next quarter.
As expected, the stock is down 6.7% since the results and currently trades at $460.57.
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 $740 million, up 22.8% year on year, surpassing analysts' expectations by 5.7%. Revenue aside, it was an impressive quarter for the company with strong sales guidance for the next quarter and solid growth in its users.
The company reported 518 million monthly active users, up 11.9% year on year. The stock is up 14.3% since reporting and currently trades at $38.24.
Read our full, actionable report on Pinterest here, it's free.
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 $53.15 million, up 6.8% year on year, surpassing analysts' expectations by 4.6%. More broadly, it was a decent quarter for the company with optimistic revenue guidance for the next quarter but slow revenue growth.
The company reported 43.4 million monthly active users, up 2.4% year on year. The stock is up 26.4% since reporting and currently trades at $2.85.
Read our full, actionable report on Nextdoor here, it's free.
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