The internet sector is thriving, with social media platforms transforming how individuals and businesses achieve success. These platforms empower users to create businesses, invest, and access new opportunities, while businesses leverage them to engage audiences and drive growth through innovative marketing strategies.

Hence, investing in social media stocks like Bumble Inc. (BMBL), Pinterest, Inc. (PINS) and Meta Platforms, Inc. (META) offers strong long-term potential.

Social media drives real-time interaction and feedback, strengthening customer loyalty and service. Through engaging content, business collaborations, and data analytics, brands enhance awareness and improve customer experiences. With the global internet services market projected to reach $766.08 billion by 2032 at a 4.4% CAGR, social media’s impact continues to reshape the business landscape.

Notably, influencers with vast followings are reshaping the market, driving product promotions, monetization, and brand success. Combined with rapid innovations in social commerce integration, AR technology, and the evolution of platforms as search engines, the social media market is projected to reach $413.16 million by 2028, growing at a 13.2% CAGR – highlighting the sector’s immense potential.

Considering these conducive trends, let’s look at the fundamentals of the three above-mentioned Internet stocks, beginning with number three.

Stock #3: Bumble Inc. (BMBL)

BMBL provides online dating and social networking platforms internationally. It owns and operates websites and applications that offer subscription and in-app purchases dating products.

In terms of the trailing-12-month EBIT margin, BMBL’s 11.59% is 16.7% higher than the 9.93% industry average. Likewise, its 11.65% trailing-12-month levered FCF margin is 31% higher than the 8.89% industry average. Furthermore, its 70.43% trailing-12-month gross profit margin is 34.7% higher than the 52.30% industry average.

BMBL’s revenues for the third quarter, which ended on September 30, 2024, were $273.61 million. Its adjusted EBITDA stood at $82.55 million, up 9.7% compared to the prior-year quarter. Furthermore, its free cash flow rose 55.7% year-over-year to $91.88 million.

Analysts expect BMBL’s revenue for fiscal 2024 to grow 1.7% year-over-year to $1.07 billion. Over the past three months, BMBL’s stock has gained 33.3% to close the last trading session at $7.88.

BMBL’s positive outlook is reflected in its POWR Ratings. It has an overall rating of B, equating to a Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.

It has an A grade for Value and a B for Growth. BMBL is ranked #36 out of 50 stocks in the A-rated Internet industry. Beyond what we stated above, we also have given its grades for Momentum, Stability, Sentiment, and Quality. Get all the BMBL ratings here.

Stock #2: Pinterest, Inc. (PINS)

PINS operates as a visual search and discovery platform internationally. Its platform allows people to find ideas, such as recipes, home and style inspiration, and others; and to search, save, and shop for the ideas.

In terms of its trailing-12-month Return on Total Assets, PINS’ 6.18% is 249% higher than the 1.77% industry average. Similarly, its 24.39% trailing-12-month levered FCF margin is 174.2% higher than the 8.89% industry average. The stock’s 1.02x trailing-12-month asset turnover ratio is 107.5% higher than the 0.49x industry average.

During the third quarter ended September 30, 2024, PINS’ revenue increased 17.7% year-over-year to $898.37 million. Its non-GAAP net income came in at $275.02 million and $0.40 per share, up 42.2% and 42.9% year-over-year, respectively. Furthermore, the company’s adjusted EBITDA rose 31.1% over the prior-year quarter to $242.13 million.

For the quarter ending December 31, 2024, PINS’ EPS and revenue are expected to increase 21.8% and 16.2% year-over-year to $0.65 and $1.14 billion, respectively. It surpassed the consensus EPS estimates in each of the trailing four quarters. Over the past month, PIN’s stock has declined marginally to close the last trading session at $29.47.

PINS’ bright prospects are reflected in its POWR Ratings. It has an overall rating of B, equating to a Buy in our proprietary rating system.

It has a B grade for Quality. It is ranked #18 in the same industry. To access the additional grades of PINS for Growth, Value, Momentum, Stability, and Sentiment, click here.

Stock #1: Meta Platforms, Inc. (META)

META engages in the development of products that enable people to connect and share with friends and family through mobile devices, personal computers, virtual reality headsets, and wearables worldwide. It operates in two segments, Family of Apps and Reality Labs.

In terms of the trailing-12-month EBIT margin, META’s 41.61% is 318.9% higher than the 9.93% industry average. Its 35.55% trailing-12-month net income margin is 844.1% higher than the 3.77% industry average. Likewise, the stock’s 19.62% trailing-12-month Capex / Sales is 444.5% higher than the 3.60% industry average.

META’s revenue for the third quarter ended September 30, 2024, increased 18.9% year-over-year to $40.59 billion. Its income from operations grew 26.2% from the previous year’s quarter to $17.35 billion. For the same period, the company’s net income amounted to $15.68 billion, or $6.03 per share, up 35.4% and 37.4%, respectively, over the prior-year quarter.

Street expects META’s EPS and revenue for the quarter ending December 31, 2024, to increase 26.5% and 17.2% year-over-year to $6.74 and $46.98 billion, respectively. It surpassed the Street EPS estimates in each of the trailing four quarters. Over the past year, the stock has gained 69.7% to close the last trading session at $599.85.

META’s POWR Ratings reflect a solid outlook. It has an overall rating of B, which translates to a Buy in our proprietary rating system.

It is ranked #16 in the Internet industry. It has an A grade for Sentiment and Quality. Click here to see META’s Growth, Value, Momentum, and Stability ratings.

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META shares were trading at $607.75 per share on Tuesday afternoon, up $7.90 (+1.32%). Year-to-date, META has gained 72.36%, versus a 27.70% rise in the benchmark S&P 500 index during the same period.

About the Author: Abhishek Bhuyan

Abhishek embarked on his professional journey as a financial journalist due to his keen interest in discerning the fundamental factors that influence the future performance of financial instruments. More...

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