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Which Social Media Stock Will Outperform in 2025: Meta Platforms, Snap, or Pinterest?
PINSPinterest(PINS) The Motley Fool·2025-01-03 11:45

Group 1: Meta Platforms - Meta Platforms experienced a significant increase in stock value, rising approximately 68% in 2024, making it the top performer among social media stocks [1] - The company boasts nearly 3.3 billion active daily users across its platforms, including Facebook, Instagram, WhatsApp, and Threads, allowing for extensive reach and targeted advertising [2] - Meta's average revenue per user (ARPU) was reported at 11.89lastquarter,withanannualaverageof11.89 last quarter, with an annual average of 46.35 per user, indicating strong monetization capabilities [3] - The company is heavily investing in artificial intelligence (AI) to enhance user engagement and ad effectiveness, utilizing its Llama AI models [3] - Despite a 4.5billionoperatinglossinitsRealityLabsegmentfocusedontheMetaverse,Metasoverallrevenuegrewby194.5 billion operating loss in its Reality Lab segment focused on the Metaverse, Meta's overall revenue grew by 19% and earnings per share increased by 37% in the third quarter [4] Group 2: Pinterest - Pinterest operates an online vision board platform with 537 million monthly active users, primarily targeting women [5] - The company has made significant investments to enhance monetization, including in-app checkouts and AI-driven tools like Performance+ to improve ad relevance and campaign efficiency [6] - Pinterest's ARPU was only 1.70 last quarter, significantly lower than Meta's, with U.S. and Canada ARPU at 7.31,whileinternationalmarketslaggedbehind[8]Thecompanyreportedan187.31, while international markets lagged behind [8] - The company reported an 18% revenue growth last quarter but forecasted a deceleration in growth for Q4, estimating a revenue increase of 15% to 17% [9] Group 3: Snap - Snap's Snapchat app is popular among younger audiences, with nearly half of its U.S. users aged between 15 and 25, and a total of 443 million active users [10] - The company has a strong international user base, with 244 million users in the Rest of World category, and reported an ARPU of 3.10 globally [11] - Snap is rolling out a new, simplified version of Snapchat aimed at enhancing user experience and increasing ad revenue, with 10 million users currently testing the redesign [12] - The company achieved a 15% revenue growth last quarter, alongside a remarkable 229% increase in adjusted EBITDA [13] Group 4: Investment Outlook - Meta is considered the safest investment choice among the three, given its proven track record and strong performance [14] - Pinterest presents a significant opportunity for growth through better monetization in international markets, particularly with its partnership with Google [14] - Snap, despite being the worst performer in 2024, is viewed as having strong rebound potential due to its valuable demographic and the upcoming redesign of its app [15]