Snap compared to Pinterest, which is better to buy?

2022-02-09T15:02:38
Pinterest Snap stocks
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Snap compared to Pinterest, which is better to buy?

Snap compared to Pinterest, which is better to buy: Both Pinterest and Snap have caused investors to lose out over the past year as their shares plunged from all-time highs.

Which successful social media stock is a better turnaround game?

Evest follows the stocks development in the following report

Topics

Stocks rebounded

Review the main challenges

Snapchat Daily Active User Growth

Growth rate review

Snap’s Changing Ad Strategies

Earnings and Ratings

Winner Snap

Stocks rebounded 

Pinterest, which reached an all-time high of $89.90 last February, has shed about 70% of its value,
as investors worry about the continuing loss of monthly active users (MAUs) in the post-close market.

Snap, which hit a record high of $83.34 last September, stumbled more than 50% ,
as Apple’s privacy changes to iOS temporarily disrupted its advertising business.

However, social media stocks recently rebounded from 52-week lows after it published its fourth-quarter earnings reports.

Pinterest predicted that the cascading loss of MAU would gradually stabilize, while Snap countered Apple’s iOS update by subtly modifying its ad formats.

 

Review the main challenges

Pinterest and Snapchat are two very different types of social media platforms, but they both generate most of their revenue from advertising.

Pin boards on Pinterest have skyrocketed in popularity during the pandemic as people stayed home and searched for more recipes,
hobbies, DIY projects, family activities, and online shopping ideas

. But its growth slowed as lockdown measures eased,
and MAUs fell from a peak of 478 million in the first quarter of 2021 to 431 million in the fourth quarter.

This slowdown has overshadowed its sequential growth in average revenue per user (ARPU) over the past three quarters,
as well as its ability to gradually transform into a “social shopping” platform through Sponsored Pins, Idea Pins, original video content, and a partnership with Shopify

 

Snapchat Daily Active User Growth

The growth of Snapchat’s Daily Active Users (DAUs) has remained broadly stable during the pandemic period as well as in the post-lockdown period.

It ended the last quarter with 319 million DAU, and YoY DAU growth has remained above 20% for the past five quarters.

However, Snap dropped the ball last year as a result of the impact Apple’s privacy update had on its targeted advertising.

Its complacency led to a disappointing profit loss in the third quarter, but it redeemed itself in the fourth by reducing its reliance on third-party data,
expanding its first-party advertising tools, and rolling out more cross-platform ads.

 

Growth rate review

Pinterest revenue increased 52% to $2.58 billion in 2021.

But revenue growth slowed significantly in the second half of the year mainly due to slower growth of MAU,
its focus on lower-revenue ad formats (Idea Pins and original videos), and lower sales Advertisements for consumer packaged goods companies. 

However, Pinterest was not meaningfully affected by Apple’s iOS update as it relies primarily on first-party and contextual ads.

Pinterest expects its “high teens” revenue to improve year-over-year in the first quarter of 2022,
and analysts expect its revenue to increase 23% for the full year.

During Pinterest’s fourth quarter report, it indicated that its MAUs grew between January 1 and February 1,
suggesting that sequential MAU growth may finally stabilize again.

 

Snap’s Changing Ad Strategies 

Snap’s sales rose 64% to $4.12 billion in 2021.

Its sales increase additionally slowed withinside the 2d 1/2 of the year,
because it struggled with the effect of Apple’s privateness replace on direct reaction marketing and marketing. 

However, Snap has additionally deepened its first-celebration facts set and trusted new monitoring equipment just like the Snap Pixel  to counteract Apple’s changes. 

As a result, Snap’s marketing and marketing fee accelerated 46% yr over yr withinside the fourth quarter.

This fee growth suggests that the company’s reputation amongst more youthful customers nonetheless offers it good sized pricing strength with advertisers.

Snap expects its sales to develop 34% to 40% yr-over-yr withinside the first quarter, and analysts anticipate its sales to grow 33% for the whole year.

 

Earnings and Ratings

Pinterest was profitable under GAAP and non-GAAP metrics in 2021.

Snap remains unprofitable on an annual basis, but posted its first GAAP profit in the fourth quarter of 2021 .

Pinterest’s non-GAAP internet profits rose 175% to $778 million in 2021.

Its adjusted EBITDA accelerated 167% to $814 million, boosting its adjusted EBITDA margin from 18% to 32%.

Analysts count on non-GAAP income in step with percentage to develop 16% this year.

Based on those forecasts, Pinterest’s inventory appears affordable to be really well worth approximately 21 instances ahead income.

Snap generated $775 million in non-GAAP internet earnings in 2021 as compared to an internet loss of $ninety one million in 2020.

Its adjusted EBITDA improved 1,265% to $617 million, in When adjusted EBITDA margin extended from 2% to 15%.

Analysts anticipate Snap’s non-GAAP EPS to upward thrust 6% for the overall year,
and its stocks exchange approximately seventy four instances that estimate.

 

Winner Snap

At first, the Pinterest stock seems cheaper.

But Snap user growth is more stable; It is not centered towards low value ads; And he doesn’t face any tough comparisons after the shutdown.

Therefore, it’s better to pay a premium for Snap’s well-rounded activity than to roll the dice at the potential turnaround of Pinterest over the next few quarters.

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