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 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 5 social networking stocks we track reported a strong Q3. As a group, revenues beat analysts’ consensus estimates by 2.6% while next quarter’s revenue guidance was 0.9% below.

While some social networking stocks have fared somewhat better than others, they have collectively declined. On average, share prices are down 4.1% 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 $51.24 billion, up 26.2% year on year. This print exceeded analysts’ expectations by 3.4%. Overall, it was a strong quarter for the company with an impressive beat of analysts’ EBITDA estimates and a decent beat of analysts’ revenue estimates.

"We had a strong quarter for our business and our community," said Mark Zuckerberg, Meta founder and CEO.

The stock is down 15.1% since reporting and currently trades at $640.26.

Read why we think that Meta is one of the best social networking stocks, our full report is 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 $584.9 million, up 67.9% year on year, outperforming analysts’ expectations by 6.3%. The business had a very strong quarter with EBITDA guidance for next quarter exceeding analysts’ expectations and a solid beat of analysts’ EBITDA estimates.

Reddit achieved the biggest analyst estimates beat and fastest revenue growth among its peers. The company reported 51.6 million daily active users, up 7.1% year on year. The market seems happy with the results as the stock is up 13.7% since reporting. It currently trades at $221.10.

Is now the time to buy Reddit? Access our full analysis of the earnings results here, it’s free for active Edge members.

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 $1.05 billion, up 16.8% 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.

Pinterest delivered the weakest performance against analyst estimates in the group. The company reported 600 million monthly active users, up 11.7% year on year. As expected, the stock is down 17% since the results and currently trades at $27.41.

Read our full analysis of Pinterest’s results here.

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 $1.51 billion, up 9.8% year on year. This number surpassed analysts’ expectations by 1%. It was a strong quarter as it also recorded a solid beat of analysts’ EBITDA estimates and a narrow beat of analysts’ revenue estimates.

The company reported 477 million daily active users, up 7.7% year on year. The stock is up 4.1% since reporting and currently trades at $7.66.

Read our full, actionable report on Snap here, it’s free for active Edge members.

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 $376 million, up 4.4% year on year. This print topped analysts’ expectations by 2.1%. Overall, it was a strong quarter as it also produced a solid beat of analysts’ EBITDA estimates and full-year EBITDA guidance slightly topping analysts’ expectations.

Yelp had the slowest revenue growth among its peers. The stock is down 6.2% since reporting and currently trades at $30.14.

Read our full, actionable report on Yelp here, it’s free for active Edge members.

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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