Like any other sector, the social media stocks have also remained under pressure in the last couple of months due to high inflation, rising interest rates and a growth stock correction and there are huge chances of the continuation of this downtrend. However, it’s a good strategy to buy low during a dip.
What has been driving the social media giant’s lower?
Recently, the shares of Snap and Pinterest hit their lowest level in more than a year. Snap shares dropped below the firm’s 2017 IPO price of $17 and trade near $12 now. The strong bearish momentum was fueled after the company admitted worse earnings and revenue guidance for the current quarter. The stock dropped 43% in a single day after the company adjusted this forecast. On the other hand, the Pinterest stock struggling to find the upside momentum after the strong sell-off as higher interest rates put downward pressure on growth stocks. The Pinterest stock has lost 42% this year and trades below $20 now.
SNAP and Pinterest Q1 earnings review
Snap, the parent company of Snapchat (NYSE: SNAP) released its first-quarter financial results for 2022 on April 22. The company beat estimates on user growth but missed revenue and earnings. Snap added 13 million more daily actives in Q1 2022, taking it up to 332 million and revenue grew 38% year-over-year to reach $1.06 billion for the quarter.
The product and idea discovery site Pinterest (NYSE: PINS) reported its first-quarter earnings for the year 2022 on April 27th. Pinterest's Q1 earnings results showed that they beat revenue and EPS estimates even though user growth declined. Pinterest grew revenue 18% year over year to $575 million and recorded a net loss of $5 million. Its global monthly active user base was 433 million, down 9% from the same quarter last year.
Which One Should You Invest In?
Based on the analysis both are good investments for the long term, but technically I feel Snap stock looks much cheaper than Pinterest which makes it a better bet right now. Snap is a much larger company than Pinterest with a market cap. $SNAP is down more than 80% from all-time highs and Snap is nearing some oversold technical levels.
For the short-term technical levels take a look at the below charts of $PINS and $SNAP.
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