Welcome to the latest episode of the Full-Court Finance podcast from Zacks Investment Research where Associate Stock Strategist Ben Rains breaks down the most recent quarterly earnings results from the three big U.S. social media companies: Facebook FB, Twitter TWTR, and Snapchat parent Snap Inc. SNAP. The episode also dives into what’s next for the three firms amid increased government scrutiny.
Facebook stock touched a new 52-week intraday high last Thursday, but has pulled back since then with FB up 50% in 2019. The firm posted stronger-than-expected top and bottom-line results. But more importantly, the social media giant saw its user base continue to expand. Its daily and monthly activity user totals, across its “Family of services,” which includes Facebook, Instagram, WhatsApp, and Messenger, are mind-blowing.
Mark Zuckerberg’s firm also plans to expand and evolve into a broader platform that includes payments and more, as it aims to compete against firms like eBay EBAY and PayPal PYPL. FB did just pay a $5 billion FTC fine as part of a larger settlement and U.S. government regulators still have their eyes on Facebook, Google GOOGL, Amazon AMZN, and other giants. Nonetheless, Facebook looks strong in an entertainment age where non-ad supported platforms like Netflix NFLX make consumers harder to reach.
Meanwhile, Snap had a blowout quarter that was driven by impressive user growth. The social media firm that focuses on disappearing pictures and videos has struggled as a public company. With that said, SNAP stock is up over 215% in 2019 and its fiscal 2019 and 2020 revenue growth projections look stellar.
Twitter was the last of the three to report its earnings. Like its peers, Twitter also posted impressive results that sent its stock to a new 52-week high on Friday. Twitter has spent money to clean up its platform and made a series of streaming video deals with everyone from ESPN DIS to Activision Blizzard ATVI. In the long-run, the social media company will remain invaluable in terms of breaking news and instant interaction. But its financial success likely rests on its ability to expand its video reach and continue to add users.
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