Why Meta's Social Media Peers Snap And Pinterest Are Plummeting Premarket Friday

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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