“Mature” is a bad word on Wall Street. But most anywhere else, that’s a good thing.
Investors show
a little respect on Wednesday after the company said it has been able to navigate a combination of factors that have impacted online advertising businesses recently at least as planned. Shares jumped 18% in after-hours trading
said revenue for the first quarter came in within its guidance range – albeit at the low end and below what analysts had forecast. Following in the footsteps of parent company Google
Alphabet‘S
missed ad revenue on Tuesday, OK is obviously great.
The cracks are still there, though, even if investors choose to ignore them. Earnings per share of $2.72 beat Wall Street forecasts — but were supported by more than $9 billion in share buybacks during the quarter. Earnings per share fell 18% from a year earlier, while net income fell 21%. Meanwhile, revenue guidance for the second quarter suggests a likely year-on-year decline – not entirely surprising given the particularly tough comparison in the second quarter of last year, but below those of previous years. what analysts hope.
Facebook‘S
The number of daily active users decreased continuously in the fourth quarter first since the company began reporting this index as a public company. And last month at an investor conference, chief financial officer David Wehner even admitted Meta’s legacy “blue” application was “at a more mature time” in North America, with expectations of the extent to users will “spill” from quarter to quarter. It’s happening: Facebook grew its North American daily active user base in the first quarter on a sequential basis, though it now appears to be losing users on that basis in Europe.
Social media stocks over the past two weeks appear to be returning to trading on performance rather than promise. Shares of Alphabet fell nearly 4% on Wednesday after the company showed vulnerability to macroeconomic factors and changes to the economy.
Apple‘S
iOS operating system.
shares are down 8% since the company said last week second-quarter sales growth would slow to an unusually low 20% to 25%.
Twitter‘S
the stock, meanwhile, is currently trading below 10%
Elon MuskIts purchase price, a testament not only to skepticism about the deal being done, but also to how bullish the platform will be on Thursday’s earnings report.
AB Bernstein analyst Mark Shmulik said in a recent note that investors’ focus has shifted “in the right direction” back to core fundamentals, including the health of technical advertising. numbers, user engagement, and profits, calling the recent hysteria fanciful concepts like the metaverse “silly season. ”
Then again, Mr. Shmulik also pointed out that in today’s online advertising game, “every name has a feather”. Yes, blue Facebook has peaked, ad revenue growth is slowing, and the metaverse is still just a dream. But Snap is still a big growth story just when you’re wearing it augmented reality glasses. And even mothers seem tired of
—Wednesday results show it is still bleeding user on an annual basis from the first quarter. Last but certainly not least, Twitter is about to become a debt-laden business one of the richest artillery pieces in the world.
The safest bet in society may now just be the most seasoned in the business. Dropping nearly $400 billion in market value over the past 12 months, Meta’s business value is just 3.1 times its futures sales as of Wednesday – less than half that of Snap and on par. with Pinterest for the lowest multiple of the bunch.
Even in Silicon Valley, sometimes it pays to be the adult in the room.
Write letter for Laura Forman at [email protected]
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