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Social media has quickly gripped the world, providing the ability to connect to anyone anywhere at any time just from a few taps.
There are positives and negatives surrounding many of these applications, but one thing seems certain – it’s not going anywhere anytime soon.
With its uprising, many stocks have also gained widespread popularity, namely Meta Platforms (META - Free Report) , Snap Inc. (SNAP - Free Report) , and Pinterest (PINS - Free Report) .
Many of these stocks sailed through rough waters in 2022, with a hawkish Federal Reserve and soaring inflation weighing heavily on sentiment.
Below is a chart illustrating the performance of all three stocks above over the last year, with the S&P 500 blended in as a benchmark.
Image Source: Zacks Investment Research
As we can see, it’s been a rough stretch over the past year.
However, over the last month, all three stocks have outperformed the S&P 500, finally finding some buyers.
Image Source: Zacks Investment Research
With the stocks finding some support as of late, it raises a valid question: should investors revisit these stocks? Let’s take a closer look.
Meta Platforms
Meta Platforms is the world’s largest social media platform, evolving its product portfolio from its Facebook app to others like Instagram and WhatsApp. Currently, the company carries a Zacks Rank #3 (Hold).
META has witnessed mixed earnings estimate revisions over the last several months.
Image Source: Zacks Investment Research
The company’s valuation multiples have retraced quite significantly; META’s forward earnings multiple of 16.7X is well beneath its 23.5X five-year median, representing an 18% discount relative to the Zacks Computer and Technology sector.
Meta Platforms carries a Style Score of a “B” for Value.
Image Source: Zacks Investment Research
META’s next quarterly release is scheduled for February 1st, 2023. Currently, the Zacks Consensus EPS Estimate of $2.11 suggests a decrease of roughly 40% year-over-year.
Pivoting to the top line, our consensus revenue estimate of $31.2 billion suggests a 7% pullback from year-ago quarterly sales of $33.7 billion.
Image Source: Zacks Investment Research
Snap Inc.
Snap’s flagship product, Snapchat, is a mobile camera application that helps people communicate through short videos and images called Snaps. The company is a Zacks Rank #3 (Hold).
Snap has seen its earnings outlook shift negative across several timeframes over the last several months.
Image Source: Zacks Investment Research
Similar to META, Snap has seen its valuation multiples pull back quite extensively; the company’s shares now trade at a 3.1X forward price-to-sales ratio, a fraction of its 12.5X five-year median and nearly in line with its Zacks sector average.
Image Source: Zacks Investment Research
Snap’s next earnings release takes place on January 31st, 2023. As it stands, the Zacks Consensus EPS Estimate of $0.10 indicates a 54% Y/Y pullback. The company’s top line appears to be in better shape, with our $1.3 billion estimate suggesting a marginal 0.4% year-over-year increase.
Image Source: Zacks Investment Research
Pinterest
Pinterest provides a platform to show users (Pinners) visual recommendations (Pins) based on their tastes and interests. The company sports a Zacks Rank #2 (Buy).
Like the stocks above, the company’s valuation multiples have pulled back by notable margins. Pinterest shares currently trade at a 5.4X forward price-to-sales, nowhere near the 11.5X median since its 2019 IPO but above its Zacks sector average by a fair margin.
Image Source: Zacks Investment Research
Pinterest has posted strong quarterly results, exceeding the Zacks Consensus EPS Estimate in nine of its last ten quarters. In its latest release, PINS crushed bottom line estimates by 120% and reported sales 3% above expectations.
Image Source: Zacks Investment Research
Bottom Line
As social media quickly gathers attention across the globe, so do the companies responsible for these applications.
And in 2022, they had a pretty rough showing amid a challenging macroeconomic group.
Image: Bigstock
Checking In on Social Media Stocks
Social media has quickly gripped the world, providing the ability to connect to anyone anywhere at any time just from a few taps.
There are positives and negatives surrounding many of these applications, but one thing seems certain – it’s not going anywhere anytime soon.
With its uprising, many stocks have also gained widespread popularity, namely Meta Platforms (META - Free Report) , Snap Inc. (SNAP - Free Report) , and Pinterest (PINS - Free Report) .
Many of these stocks sailed through rough waters in 2022, with a hawkish Federal Reserve and soaring inflation weighing heavily on sentiment.
Below is a chart illustrating the performance of all three stocks above over the last year, with the S&P 500 blended in as a benchmark.
Image Source: Zacks Investment Research
As we can see, it’s been a rough stretch over the past year.
However, over the last month, all three stocks have outperformed the S&P 500, finally finding some buyers.
Image Source: Zacks Investment Research
With the stocks finding some support as of late, it raises a valid question: should investors revisit these stocks? Let’s take a closer look.
Meta Platforms
Meta Platforms is the world’s largest social media platform, evolving its product portfolio from its Facebook app to others like Instagram and WhatsApp. Currently, the company carries a Zacks Rank #3 (Hold).
META has witnessed mixed earnings estimate revisions over the last several months.
Image Source: Zacks Investment Research
The company’s valuation multiples have retraced quite significantly; META’s forward earnings multiple of 16.7X is well beneath its 23.5X five-year median, representing an 18% discount relative to the Zacks Computer and Technology sector.
Meta Platforms carries a Style Score of a “B” for Value.
Image Source: Zacks Investment Research
META’s next quarterly release is scheduled for February 1st, 2023. Currently, the Zacks Consensus EPS Estimate of $2.11 suggests a decrease of roughly 40% year-over-year.
Pivoting to the top line, our consensus revenue estimate of $31.2 billion suggests a 7% pullback from year-ago quarterly sales of $33.7 billion.
Image Source: Zacks Investment Research
Snap Inc.
Snap’s flagship product, Snapchat, is a mobile camera application that helps people communicate through short videos and images called Snaps. The company is a Zacks Rank #3 (Hold).
Snap has seen its earnings outlook shift negative across several timeframes over the last several months.
Image Source: Zacks Investment Research
Similar to META, Snap has seen its valuation multiples pull back quite extensively; the company’s shares now trade at a 3.1X forward price-to-sales ratio, a fraction of its 12.5X five-year median and nearly in line with its Zacks sector average.
Image Source: Zacks Investment Research
Snap’s next earnings release takes place on January 31st, 2023. As it stands, the Zacks Consensus EPS Estimate of $0.10 indicates a 54% Y/Y pullback. The company’s top line appears to be in better shape, with our $1.3 billion estimate suggesting a marginal 0.4% year-over-year increase.
Image Source: Zacks Investment Research
Pinterest
Pinterest provides a platform to show users (Pinners) visual recommendations (Pins) based on their tastes and interests. The company sports a Zacks Rank #2 (Buy).
Like the stocks above, the company’s valuation multiples have pulled back by notable margins. Pinterest shares currently trade at a 5.4X forward price-to-sales, nowhere near the 11.5X median since its 2019 IPO but above its Zacks sector average by a fair margin.
Image Source: Zacks Investment Research
Pinterest has posted strong quarterly results, exceeding the Zacks Consensus EPS Estimate in nine of its last ten quarters. In its latest release, PINS crushed bottom line estimates by 120% and reported sales 3% above expectations.
Image Source: Zacks Investment Research
Bottom Line
As social media quickly gathers attention across the globe, so do the companies responsible for these applications.
And in 2022, they had a pretty rough showing amid a challenging macroeconomic group.
All three stocks above – Meta Platforms (META - Free Report) , Snap Inc. (SNAP - Free Report) , and Pinterest (PINS - Free Report) – provide exposure to social media.
In addition, all three have seen their valuation multiples pull back considerably, perhaps enticing long-term investors.
Still, a more sound strategy would be to wait until many stocks from the realm start witnessing positive earnings estimate revisions.