Forget Facebook: Invest in These Social Media Platforms Instead
Image source: Getty Images
Since its IPO, the shares of the social media giant Facebook (NASDAQ: FB) gained nearly 750%. In comparison, the S&P 500 Index returned less than 300% during this period. Facebook has become a household name around the world, as its namesake platform serves 2.8 billion users every month. Its portfolio of social media apps that include Instagram, Messenger and WhatsApp attracts 3.3 billion monthly active users.
In 2020, Facebook sales grew 22%, while profits grew 57% year-over-year. Wall Street expects its sales to grow 39% to $ 120 billion in 2021 and 20% to $ 143 billion in 2022. By comparison, its adjusted profits are expected to grow 29% annually over the years. next five years. Valued at a market cap of $ 914 billion, the FB share is priced at a futures price / earnings multiple of 22 times, which is really appealing.
But the Capitol riot that rocked the nation a few months ago indicated that Facebook did not have full control of its platforms. There is also a chance for the company’s turnover to decelerate, as a tech giant Apple allows users to opt out of targeted advertisements. Additionally, Facebook continues to be plagued by regulatory issues, as seen by the company’s recent whistleblower, who claimed it was not doing enough on content regulation.
With these factors in mind, we’ll take a look at two more social media companies that may overtake Facebook in 2021 and beyond.
In the second quarter of 2021, Twitter (NYSE: TWTR) Sales were up 74% year-on-year to $ 1.19 billion, significantly higher than analysts’ forecast of $ 1.07 billion. Ad sales, which account for the majority of Twitter’s revenue, increased 87%, while its data licenses and other businesses increased its sales by 13%.
Over the period last year, Twitter sales were down 19% year-over-year, allowing the company to release strong financial metrics in the second quarter of 2021. Twitter increased the number of daily active users by 20 million year over year, translating into an 11% growth. . This growth has been attributed to product improvements and conversations surrounding current events.
In the third quarter, Twitter was forecasting sales of between $ 1.22 billion and $ 1.3 billion, suggesting 62% year-over-year growth midway through.
Pinterest (NYSE: PINS) went public in mid-2019, and its shares have since gained more than 110%. A visual discovery engine, Pinterest is valued at a market cap of $ 33 billion. In the second quarter of 2021, Pinterest’s user base grew 9% year-over-year to 454 million. International MAUs increased by 13% while in the United States they fell by 5%.
This could be of concern to investors, as the company generates $ 5.08 in average revenue per user in the United States. By comparison, its ARPU for international users is only $ 0.36.
Pinterest managed to increase sales from just $ 473 million in 2017 to $ 1.7 billion in 2020. Analysts expect sales to increase 55% to $ 2.62 billion in 2021 and 31% to $ 3.43 billion in 2022. By comparison, its annual adjusted profit 50% over the next five years.
The Pinterest stock is trading at a discount of almost 40% from the consensus target price estimates.