Thanks to the remote lifestyle, the social media industry has witnessed solid growth amid the COVID-19 pandemic. And demand for social media platforms is expected to increase over the long term due to their capacity to engage millions of users internationally.
According to Statista, almost 4.41 billion people are set to use social media worldwide by 2025, more than half of today’s global population. Diversified content merged with increased preferences for virtual social interaction amid rapid digitization might set the industry for a long bull run.
Therefore, we think it could be wise to add quality social media stocks Meta Platforms, Inc. (FB) and Pinterest, Inc. (PINS) to one’s watch list. Wall Street analysts expect these stocks to rally by more than 45% in price in the near term.
Meta Platforms, Inc. (FB)
FB in Menlo Park, Calif., develops products that allow people to connect and share with friends and family through mobile devices, personal computers, virtual reality headsets, wearables, and in-home devices worldwide. It operates in two segments, Family of Apps and Reality Labs.
On Feb. 2, 2022, Mark Zuckerberg, FB founder, and CEO, said, “I’m encouraged by the progress we made this past year in a number of important growth areas like Reels, commerce, and virtual reality, and we’ll continue investing in these and other key priorities in 2022 as we work towards building the metaverse.”
FB’s total revenue came in at $33.67 billion for the fourth quarter, ended December 31, 2021, up 19.9% year-over-year. Its net cash provided by operating activities came in at $18.1 billion, up 28.9% year-over-year. The company’s total assets were $165.99 billion for the period ended Dec. 31, 2021, versus $159.32 billion for the period ended Dec. 31, 2020.
For its fiscal year 2023, analysts expect FB’s revenue to increase 17.1% year-over-year to $155.35 billion. The company’s EPS is expected to grow 21.4% per annum for the next five years. In addition, it surpassed the consensus EPS estimates in three of the trailing four quarters. The stock closed yesterday’s trading session at $211.03. Wall Street analysts expect the stock to hit $332.93 in price in the near term, which indicates a potential 57.8% upside.
Pinterest, Inc. (PINS)
PINS in San Francisco operates as a visual discovery engine in the United States and internationally. It shows visual machine learning recommendations based on pinners’ tastes and interests, and its engine allows people to find inspiration for their lives.
On Feb. 3, 2022, Ben Silbermann, CEO and co-founder, PINS, said, “We took important steps in 2021 with the launch of our foundational technology to deliver a video-first publishing platform. And, I’m proud to say that for the first time, we surpassed $2 billion in revenue for the year—growing 52% over the previous year—and reached our first full year of GAAP profitability.”
For its fiscal fourth quarter, ended Dec.31, 2021, PINS’ revenue came in at $846.65 million, representing a 20% year-over-year rise. Its non-GAAP net income came in at $339.45 million, up 15.3% year-over-year. Also, its adjusted EBITDA came in at $350.86 million, up 17.3% year-over-year.
Analysts expect PINS’ revenue to increase 26.6% year-over-year to $3.96 billion in its fiscal year 2023. Its EPS is expected to increase 33.7% year-over-year in fiscal 2023 to $1.35. Also, it surpassed the EPS estimates in each of the trailing four quarters. The stock closed yesterday’s trading session at $26.75. Wall Street analysts expect the stock to hit $39.43 in the near term, which indicates a potential upside of 47.4%.
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FB shares were trading at $209.08 per share on Tuesday morning, down $1.95 (-0.92%). Year-to-date, FB has declined -37.84%, versus a -8.76% rise in the benchmark S&P 500 index during the same period.
About the Author: Riddhima Chakraborty
Riddhima is a financial journalist with a passion for analyzing financial instruments. With a master's degree in economics, she helps investors make informed investment decisions through her insightful commentaries. More...
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