Investors Soured On Twitter Earnings; Other Social Media Stocks Surging
SAN FRANCISCO (KCBS) – Social media stocks are some of the bigger movers on Wall Street, and they’re heading in both directions. Overall, Internet-related stocks have rallied big time over the past year, with Facebook doubling in value, Yelp quadrupling in price, while Pandora has tripled in value.
On the other hand, Twitter was getting slammed on its first earnings report as a publicly-traded firm.
The company topped expectations in the recent quarter, but its Timeline views fell seven percent from the prior quarter, and its user growth of 3.8-percent was weaker than expected.
That’s leading to a host of analyst downgrades on the stock, which has more than doubled in value since its IPO three months ago.
UBS says Twitter is overvalued at its current price given that its trading 30-times higher than its sales, compared to Facebook trading thirteen times higher.
By comparison, Facebook’s earnings report last week was hailed as a winner, with profit soaring to $523-million dollars, a number that will likely grow as Facebook starts selling ads on Instagram, which saw its user base double over the past year to 180-million users.
Yelp’s results are getting cheered, as its revenue gained nearly 72% to more than $70-million dollars.
The online reviewer saw strong growth in several key categories, including reviews up 47-percent from a year earlier to 53-million, unique monthly users growing 39-percent from a year ago to 120-million.
Pandora turned in a solid fourth quarter as revenue soared 52% to $200-million dollars, but its getting stung on its forecast for the current quarter, which is calling for a loss with revenue down to a range of $170-176-million dollars.
The Oakland-based Internet radio firm continues to take on big expenses as it grows its sales team, as the company says it will continue to open new local markets.
Social gaming companies are once again hot stock picks after getting pummeled over the past year.
Glu Mobile is getting raves after its revenue rose 62-percent to nearly $43-million dollars, and it provided stronger than expected guidance for the current quarter.
Fellow San Francisco gamer Zynga got a nice boost last week on its $527-million dollar purchase of rival NautralMotion.