Analyst: Snap, Twitter Off To Strong Starts In Q4

Most investors have to wait until the end of a quarter to get feedback on how a company performed during the quarter. However, internet stock investors can get some helpful hints about usage and download trends along the way.

Social Media And Video

On Tuesday, Nomura Instinet analyst Mark Kelley discussed the latest Sensor Tower data for top internet stocks. Snap Inc SNAP and Twitter Inc TWTR are off to a hot start to the quarter, according to Nomura.

Kelley said Snapchat daily active user data suggests the platform is tracking for between 6 million and 12 million net adds in the fourth quarter, well above its guidance of between 4 million and 5 million adds.

Twitter is also tracking for between 6 million and 9 million net monetizable DAU adds, well above consensus estimates of 2 million adds.

Netflix Inc NFLX kicked off a critical quarter with a 2% increase in downloads in October, well below the mid-to-high teen percentages it was producing in late summer. Amazon.com, Inc. AMZN Prime downloads were up 46% in October, a 3% increase from September’s growth rate. Walt Disney Co DIS subsidiary Hulu saw its download growth rate plummet from 25% in September to just 9% in October.

Dating, Search And Music

Nomura estimates Match Group Inc MTCH hit dating app Tinder grew its third-quarter revenue by 7% and its October revenue by 18%. Match is set to report third-quarter earnings after the close on Tuesday.

Alphabet, Inc. GOOG GOOGL also recorded some encouraging download data in September. Google Search downloads were up 98% in October, while YouTube Music downloads were up 11%.

Spotify Technology SA SPOT downloads were up 21% in October, while Amazon Music downloads were up 37%.

Benzinga’s Take

Sensor Tower data tends to correlate relatively closely to actual net adds for Tinder, Snapchat and Twitter. Traders should continue to monitor the monthly data to keep from getting a big surprise on fourth-quarter earnings day.

Do you agree with this take? Email feedback@benzinga.com with your thoughts.

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