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Key Takeaways
- Snap and Reddit, along with Meta, are also due to release their quarterly results in the coming week.
- Their results may provide valuable insights into the state and future of the digital advertising industry.
- The shares of all three companies are struggling to start the year due to economic uncertainty.
Meta (META), a social media company, isn’t alone in reporting earnings this week.
Snap (SNAP) along with WhatsApp parent Meta and Reddit, (RDDT), are set to release their quarterly results this coming week. This will give us more information about the state of digital advertising.
Snap’s earnings will be released after the close of the market on Tuesday. The analysts at Deutsche Bank gave the stock a rating of “buy”, but they lowered their target price to $10 on Monday from $14. They cited a decrease in digital ad expenditure. Their target is $11, just below the consensus among analysts polled at Visible Alpha. This would mean a roughly 25% increase from Monday’s closing price of $8.83.
Stocks have had a rough start to 2025. Shares are down 18% year-to date amid economic uncertainty due to President Trump’s changing tariff policies. Reddit’s shares have lost almost a quarter of value in the same period. Meta shares have dropped by 6%.
The analysts at Deutsche Bank said they would be watching Snap’s earnings to “clarify advertiser sentiments and the impact of the macro environment on budgets.” Deutsche Bank said that the platform was less exposed to Chinese spending on e-commerce than some of its competitors, and could benefit if TikTok, owned by Chinese companies, is banned in the U.S.
Reddit is scheduled to report Thursday. The analysts say that it has been “the most impacted” by the recent macro weakness in its peer groups. They also said that the company “has tapped experimental ad-budgets for growth,” which are usually the first cuts during a pullback. Deutsche Bank dropped its price target to $180 from $235, though still above the Street consensus of $152 and Monday's close around $121.
Reddit has also been focusing on daily active users after it missed expectations in a quarter, in part due to changes in the Google Search algorithm.
Analysts noted that Alphabet’s (GOOGL) better-than expected results could provide a “positive reading” of Reddit as well as support “sustained” momentum for Snap. Alphabet’s success with AI could also bode a good thing for Meta, which is set to report on Wednesday. Analysts are largely bullish about its AI-driven growth.
