Snap and Pinterest Stocks Sink After Meta’s Big Miss. They Are Reporting Earnings Thursday.
Shares of Snap and Pinterest and pretty much all social media stocks were falling sharply Thursday after Meta Platforms , the parent of Facebook, reported weaker-than-expected fourth-quarter earnings and issued a first-quarter revenue outlook that was well below expectations.
Both Snap (ticker: SNAP) and Pinterest (PINS) are scheduled to report earnings after the closing bell Thursday, and Wall Street likely will be paying even closer attention following the disappointing results from Meta (FB).
Snap, the owner of Snapchat, is forecast by analysts to report a fourth-quarter loss of 9 cents a share on revenue of $1.2 billion. A year earlier, Snap reported a loss of 8 cents a share on revenue of $911 million.
Snap was falling 19.1% on Thursday to $25.95. The stock has declined 44.8% in 2022 and 55.5% over the last one year.
Wedbush analysts in late January downgraded the stock to Neutral from Outperform, and slashed the target price on the shares to $36 from $56, citing risks to revenue growth and tough competition from rival TikTok.
The analysts also highlighted IDFA headwinds for Snap, which refer to changes by Apple
(AAPL) to rules for advertising on mobile apps. When it reported third-quarter earnings last October, Snap disclosed the impact on its advertising business as a result of the iOS changes was much greater than expected, causing the stock to sink.
Meta CEO Mark Zuckerberg, on a conference call Wednesday, noted that Apple’s iOS changes, along with new regulations in Europe, have made it difficult for companies like Facebook that are looking to offer personalized ads. Zuckerberg also noted the competition from TikTok, in terms of how users spend their time, according to a preliminary transcript provided by Sentieo.
Pinterest, the image-sharing platform, is forecast by analysts surveyed by FactSet to report fourth-quarter earnings of 45 cents a share on revenue of $827 million. The company earned 43 cents a share a year earlier on revenue of $706 million.
Pinterest shares were falling 8.5% to $25 on Thursday. The stock has declined 31.2% in 2022 and about 68% over the past year.
Wall Street is mixed on Pinterest’s outlook. Analysts at Piper Sandler last month upgraded Pinterest to Overweight from Neutral, saying that the recent selloff in shares — paired with recent growth in mobile users — was an opportunity for investors. Piper Sandler lowered its price target on the stock to $53 from $58.
But Guggenheim analysts downgraded Pinterest shares, citing sequential global user declines.
Write to Joe Woelfel at [email protected]
