Shares of Snap, Inc. SNAP and Pinterest, Inc. PINS were slumping in premarket trading, reacting to their respective quarterly results.
Snap’s Q1 Topline, Guidance Trail: Snap, the parent of Snapchat, reported first-quarter revenue that trailed expectations, and key user metrics, including global daily active users, were shy of estimates. The bottom-line result beat estimates.
The company, though not issuing formal guidance, hinted at an internal revenue forecast for $1.04 billion for the second quarter, trailing the consensus estimate of $1.1 billion.
Commenting on the results, KeyBanc Capital Markets analyst Justin Patterson noted that the softness reflected some advertiser disruption from ad platform updates and investing in growth.
The analyst models a 2% revenue decline for 2023 and near break-even EBITDA. He said that Snap's ad peers offer faster growth and more meaningful margins, prompting him to stay on the sidelines.
The firm has a Sector Weight rating on Snap shares.
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Pinterest Guidance Disappoints: Pinterest reported above consensus revenue, EBITDA, and monthly active users but the company. The company said it expects second-quarter growth to be roughly in line with the growth seen in the previous two quarters.
This suggests that second-quarter revenue trailing the 6.10% growth forecast by analysts.
The pace of improvement at Pinterest will cause concerns, Patterson said in a separate note. The analyst said he is confident the company can return to over 20% revenue growth and more than 20% EBITDA margin as economic conditions normalize and product cycles manifest.
The analyst maintained his Overweight rating and $32 price target.
The quarterly results of these companies came in contrast to Meta Platforms, Inc. META, which reported revenue and earnings that exceeded expectations. The company's bread-and-butter ad revenue inflected higher. Investors cheered the results, sending its stock up by over 13% on Thursday.
Price Action: In premarket trading on Friday, Snap shares tumbled 18.57% to $8.55 and Pinterest plunged 13.86% to $23.49, according to Benzinga Pro data.
Meta fell a more modest 0.37% to $237.67 in the premarket.
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