As the craze of earnings season draws to a close, here’s a look back at some of the most exciting (and some less so) results from Q3. Today, we are looking at social networking stocks, starting with Nextdoor (NYSE:KIND).
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 very strong Q3. As a group, revenues beat analysts’ consensus estimates by 2.9% while next quarter’s revenue guidance was 2.4% above.
Luckily, social networking stocks have performed well with share prices up 18.7% on average since the latest earnings results.
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 $65.61 million, up 17% year on year. This print exceeded analysts’ expectations by 5.1%. Overall, it was a very strong quarter for the company with EBITDA guidance for next quarter exceeding analysts’ expectations.
Unsurprisingly, the stock is down 3.4% since reporting and currently trades at $2.50.
Is now the time to buy Nextdoor? Access our full analysis of the earnings results here, it’s free.
Best Q3: 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 $348.4 million, up 67.9% year on year, outperforming analysts’ expectations by 10.6%. The business had an exceptional quarter with EBITDA guidance for next quarter exceeding analysts’ expectations.
Reddit scored the biggest analyst estimates beat and fastest revenue growth among its peers. The company reported 48.2 million daily active users, up 50.6% year on year. The market seems happy with the results as the stock is up 106% since reporting. It currently trades at $168.99.
Is now the time to buy Reddit? Access our full analysis of the earnings results here, it’s free.
Weakest Q3: 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 $898.4 million, up 17.7% year on year, in line with analysts’ expectations. It was a mixed quarter as it posted an impressive beat of analysts’ EBITDA estimates but revenue guidance for next quarter slightly missing analysts’ expectations.
As expected, the stock is down 10% since the results and currently trades at $30.55.
Read our full analysis of Pinterest’s results here.
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 $40.59 billion, up 18.9% year on year. This result was in line with analysts’ expectations. Aside from that, it was a satisfactory quarter. Meta blew past analysts’ EBITDA and EPS expectations. On the other hand, its daily active people missed and it called for "significant capital expenditures growth in 2025".
The company reported 3.29 billion daily active users, up 4.8% year on year. The stock is up 6.2% since reporting and currently trades at $628.34.
Read our full, actionable report on Meta 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 $360.3 million, up 4.4% year on year. This result met analysts’ expectations. It was an exceptional quarter as it also put up a solid beat of analysts’ EBITDA estimates and full-year EBITDA guidance exceeding analysts’ expectations.
Yelp had the weakest performance against analyst estimates and slowest revenue growth among its peers. The stock is up 8.7% since reporting and currently trades at $39.50.
Read our full, actionable report on Yelp here, it’s free.
Market Update
The Fed’s interest rate hikes throughout 2022 and 2023 have successfully cooled post-pandemic inflation, bringing it closer to the 2% target. Inflationary pressures have eased without tipping the economy into a recession, suggesting a soft landing. This stability, paired with recent rate cuts (0.5% in September 2024 and 0.25% in November 2024), has fueled a strong year for the stock market in 2024. The markets surged further after Donald Trump’s presidential victory in November, with major indices reaching record highs in the days following the election. Still, questions remain about the direction of economic policy, as potential tariffs and corporate tax changes add uncertainty heading into 2025.
Want to invest in winners with rock-solid fundamentals? Check out our Top 5 Quality Compounder Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.
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