3 Social Media Stocks Wall Street Predicts Will Rally by 30% or More
Despite the economy’s reopening, social media platforms are securing increasing user engagement. Thus, Wall Street analysts expect Snap (SNAP), Twitter (TWTR), and Bumble (BMBL) to gain 30% in price or...
Despite the economy’s reopening, social media platforms are securing increasing user engagement. Thus, Wall Street analysts expect Snap (SNAP), Twitter (TWTR), and Bumble (BMBL) to gain 30% in price or more in the coming months. Read on.
Despite the reopening of the economy and resumption of outdoor activities, the demand for social media platforms is increasing rapidly. Social media users have increased 9.9% over the past 12 months to 4.55 billion in October. According to Global WebIndex, 57.6% of the world population now uses social media. Furthermore, the global social networking platforms market is expected to reach $939.68 billion by 2026, registering a 25.4% CAGR .
Social media platforms gained immense popularity during the height of the COVID-19 pandemic because people were forced to physically distance themselves from others and turned to social media as a means of staying socially connected. The adoption of social media platforms is still increasing for entertainment purposes and to stay connected with people worldwide for business, education, health, and other works that can be done virtually. Investors’ interest in social media stocks is evidenced by the Global X Social Media ETF (SOCL) 8.2% returns over the past year.
Wall Street analysts expect quality social media stocks Snap Inc. (SNAP), Twitter, Inc. (TWTR), and Bumble Inc. (BMBL) to gain significantly in the near term. Therefore, we think these stocks could be solid additions to one’s watchlist.
Snap Inc. (SNAP)
Popular messaging app and camera company, SNAP, needs no introduction. The Venice, Calif.-based company offers Snapchat and camera applications with functionalities, and had more than 514 million monthly active users as of July 2021.
Last month, SNAP and Google partnered to launch “Quick Tap to Snap.” The partnership created a camera-mode version of SNAP that will be accessible directly from a phone lock screen. SNAP believes that the lock screen integration on the Google Pixel 6 phone is key to making SNAP more innovative and faster for its users.
SNAP’s revenue for the third quarter, ended September 30, 2021, increased 57.3% year-over-year to $1.07 billion. The company’s net loss decreased 64% from its year-ago value to $71.96 million. Its adjusted EBITDA grew 209.1% from the prior-year quarter to $174.2 million. Also, the company’s loss per share declined 64.3% year-over-year to $0.05.
Analysts expect SNAP’s revenue for its fiscal year 2021 to be $4.02 billion, representing 60.4% year-over-year growth. The company has an impressive earnings surprise history; it beat the consensus EPS estimates in each of the trailing four quarters. Its EPS is expected to increase 700% in the current year.
The stock has surged 28% in price over the past year. Closing the last trading session at $53.17, the $75.88 average analyst price represents a 42.7% potential gain.
Twitter, Inc. (TWTR)
Popular social media platform provider TWTR in San Francisco is a multinational technology company that enables people to connect virtually. In the third quarter, TWTR’s daily active users in the U.S. totaled 37 million, and it had more than 397 million monthly active users as of July 2021. The company’s innovative edge and brand value have allowed it to enjoy strong growth over the years
During the third quarter, ended September 30, 2021, TWTR’s revenue increased 37.1% year-over-year to $1.28 billion. The company’s interest income came in at $8.13 million. Its cash and cash equivalents grew 74.7% for the six months ended September 30, 2021, to $3.47 billion.
TWTR’s revenue is expected to increase 37% year-over-year to $5.09 billion in its fiscal year 2021. The company has surpassed the consensus EPS in three of the trailing four quarters. Its EPS is estimated to grow 121.6% in the current year.
The stock has soared 21.6% in price over the past year. The $69.16 consensus price target represents a 30.1% potential gain from the $53.15 last closing price.
Bumble Inc. (BMBL)
BMBL is an online dating platform that operates Bumble and Badoo apps to connect people to build relationships. The Austin, Tex.-based company owns and operates websites and applications that offer subscription and credit-based dating products. BMBL’s premium subscription offerings include Liked You, Extra Shows, and Undo Vote.
BMBL’s total revenue increased 37.8% year-over-year to $186.22 million for the second quarter, ended June 30, 2021. The company’s cash and cash equivalents grew 96.8% for the six months ended June 30, 2021, to $252.02 million. Also, its bumble app revenue rose 55% from its year-ago value to $127.3 million.
For the fiscal year 2021, BMBL’s revenue is estimated to be $761.55 million, representing 40.5% year-over-year growth. Analysts expect BMBL’s EPS to increase 3,400% in the current year.
The stock has surged 8.4% in price over the past three months. Closing its last trading session at $52, the $70 average analyst price target represents a 34.6% potential upside.
SNAP shares were trading at $54.71 per share on Monday morning, up $1.54 (+2.90%). Year-to-date, SNAP has gained 9.27%, versus a 26.65% rise in the benchmark S&P 500 index during the same period.
About the Author: Priyanka Mandal
Priyanka is a passionate investment analyst and financial journalist. After earning a master's degree in economics, her interest in financial markets motivated her to begin her career in investment research.
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