On Friday morning, Wall Street continued to bring enthusiasm as investors remained extremely optimistic about the prospects for the US economy to recover as the COVID-19 pandemic gradually came under control. Some market benchmarks have reached the intraday record high with solid progress. From 11:30 EST the Dow Jones Industrial Average (DJINDICES: ^ DJI) climbed 107 points to 31,163. The S&P 500 (SNPINDEX: ^ GSPC) rose 14 points to 3,885, and the Nasdaq Compound (NASDAQINDEX: ^ IXIC) increased by 39 points to 13,817.
Investors always like to identify trends that create profits for smart investors. Lately has been a popular area on social media, but you have to look beyond the biggest players in the industry to find the biggest recent success stories. On Friday morning, both Pinterest (NYSE: PINS) and Cut (NYSE: SNAP) their shares rose higher after showing good results, and this may well promise the two social media companies in their efforts to become more influential members of the industry.
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Shares of Pinterest climbed 5% late Friday morning. The stock rose by as much as 11% in public as investors got their first chance to respond to the latest results from the picture-based social media venture.
Pinterest’s numbers looked phenomenal; the company has benefited from greater participation as the COVID-19 pandemic continues. Revenue from the fourth quarter increased by 76%, with a maximum of one year in which sales increased by almost half. Worldwide monthly active users have grown by 37%, and 459 million users now regularly visit the Pinterest site. Pinterest also made money in the fourth quarter, although the quarterly profit was not enough to take the company out of the red for the full year in 2020.
Pinterest in particular has succeeded in following up on some of its biggest strategic initiatives. The company highlighted international growth, with overseas revenue rising 145% in the fourth quarter, more than doubling for the full year. The number of users was higher worldwide, but a 67% increase in international revenue per user showed that Pinterest’s efforts to make money were going better.
Pinterest sees revenue growth continue in the first quarter of 2021, with guidance of 70% or more. This could help keep the stock on its upward trajectory in the new year.
Snap is it
Shares of Snap rose more than 6% on Friday morning, contributing to gains that its share price has increased sixfold since its March low. The Snapchat parent said encouraging things in his fourth-quarter financial report.
Snap has had about the same success as Pinterest. Revenue for the fourth quarter increased by 62% from the previous year. Snap reduced its losses by more than half in the quarter, and achieved a pre-tax adjusted operating profit for the full year. The daily active number of users reached 265 million, which is 47 million higher than the year ago.
Snap has pointed to several favorable trends that are helping it move forward. The social media giant said more than 90% of the Generation Z population in the US watched Snapshows and publishing content, while Snapchat members over the age of 35 also increased their involvement with the platform. Augmented reality is also gaining momentum, with over 200 million daily active users participating.
Growth is likely to continue, with Snap forecasting revenue of as much as 60% in the first quarter. As the company expands its reach and wants to serve a wider audience, shareholders like what they see of Snap.