Social-media and internet stocks haven’t had an easy stretch lately, but one analyst sees some encouraging behavioral trends in the near-term.
Evercore ISI’s Anthony DiClemente regularly looks at app-download data points, which he deems “paramount to understanding the trends underlying the largest internet companies” given how much time consumers spend on their mobile devices. He recently rounded up the August trends from analytics firm SensorTower and shared his thoughts on the potential implications for major tech companies.
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and Match Group Inc.
fared well in his analysis, and Facebook Inc.
remained dominant even though Instagram downloads “cooled down” a bit. The consensus on Twitter Inc.
was less conclusive, and the Spotify Technology SA
data shed light on some broader trends in streaming music.
Netflix looks well-positioned to beat subscriber estimates in international markets, DiClemente said, as downloads accelerated once again in August. He saw overseas downloads climbing by more than 50% year over year so far this quarter, the fastest rate since the third quarter of 2017.
Meanwhile, Match Group could surprise investors once again with another quarter of “robust” Tinder growth. DiClemente’s look at the SensorTower numbers suggests another better-than-expected period in terms of Tinder monetization. Separately, he’s encouraged by the company’s college-focused Tinder U product.
Facebook once again held the top four spots in August in terms of global downloads, DiClemente wrote, with WhatsApp, Messenger, Facebook and Instagram dominating the charts. Instagram wasn’t quite as red-hot as it was earlier in the summer, DiClemente said, but even imperfect numbers look fairly good for the Facebook properties: “Combined, Facebook and Instagram now account for 78.6% of global social app downloads, up from 78.2% in July.”
For Spotify, the trends suggest a mixed bag. On one hand, download numbers for August looked similar to the strong ones DiClemente saw last quarter. But he noted that the mix is shifting toward emerging markets, which is good for the company’s long-term goals but may mean lower average revenue per user in the near term.
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One interesting data point cited by DiClemente was that Spotify is “relatively more popular” than Pandora Media Inc.
on iPhones in emerging markets, compared with on Android phones. “One possible conclusion here is that despite the broader shift to subscription music services, ad-supported streaming remains an attractive value proposition relative to paid alternatives for lower-end consumers,” he wrote.
Twitter has seen its stock get crunched in recent days amid weakness in the social-media landscape, and DiClemente’s app-download picture isn’t so clear. He sees that Twitter accounted for a greater portion of U.S. app downloads in August than in July, but the company lost share internationally.
DiClemente has outperform ratings on shares of Facebook and Spotify. He rates Match, Netflix, Pandora, and Twitter in-line.
Cascend Securities analyst Eric Ross was slightly more upbeat about the trends at Twitter, writing of a month-over-month increase in downloads. “These are real people, not bots, who are downloading the Twitter app onto their phones,” he said. Ross rates Twitter a buy.