As the Q1 earnings season comes to a close, it’s time to take stock of this quarter’s best and worst performers in the digital media & content platforms industry, including Stride (NYSE:LRN) and its peers.
AI-driven content creation, personalized media experiences, and digital advertising are evolving, which could benefit companies investing in these themes. For example, companies with a portfolio of licensed visual content or platforms facilitating direct monetization models could see increased demand for years. On the other hand, headwinds include growing regulatory scrutiny on AI-generated content, with many publishers balking at anything that gets no human oversight. Additional areas to navigate include the phasing out of third-party cookies, which could make traditional ways of tracking the online behavior of consumers (a secret sauce in digital marketing) much less effective.
The 7 digital media & content platforms stocks we track reported a slower Q1. As a group, revenues missed analysts’ consensus estimates by 3.5% while next quarter’s revenue guidance was in line.
While some digital media & content platforms stocks have fared somewhat better than others, they have collectively declined. On average, share prices are down 2.9% since the latest earnings results.
Stride (NYSE:LRN)
Formerly known as K12, Stride (NYSE:LRN) is an education technology company providing education solutions through digital platforms.
Stride reported revenues of $613.4 million, up 17.8% year on year. This print exceeded analysts’ expectations by 3.6%. Despite the top-line beat, it was still a mixed quarter for the company with full-year revenue guidance topping analysts’ expectations but a significant miss of analysts’ EPS estimates.
Stride scored the highest full-year guidance raise of the whole group. Still, the market seems discontent with the results. The stock is down 12% since reporting and currently trades at $128.56.
Is now the time to buy Stride? Access our full analysis of the earnings results here, it’s free.
Best Q1: Rumble (NASDAQ:RUM)
Founded in 2013 as a champion for content creator rights and free expression, Rumble (NASDAQ:RUM) is a video sharing platform that positions itself as a free speech alternative to mainstream platforms, offering creators more favorable revenue-sharing opportunities.
Rumble reported revenues of $23.71 million, up 33.7% year on year, outperforming analysts’ expectations by 4.1%. The business had a stunning quarter with an impressive beat of analysts’ EPS estimates.
Rumble scored the biggest analyst estimates beat and fastest revenue growth among its peers. The market seems happy with the results as the stock is up 12% since reporting. It currently trades at $8.70.
Is now the time to buy Rumble? Access our full analysis of the earnings results here, it’s free.
Weakest Q1: IAC (NASDAQ:IAC)
Originally known as InterActiveCorp and built through Barry Diller's strategic acquisitions since the 1990s, IAC (NASDAQ:IAC) operates a portfolio of category-leading digital businesses including Dotdash Meredith, Angi, and Care.com, focusing on digital publishing, home services, and caregiving platforms.
IAC reported revenues of $570.5 million, down 8.6% year on year, falling short of analysts’ expectations by 29.5%. It was a disappointing quarter as it posted a significant miss of analysts’ EPS estimates.
IAC delivered the weakest performance against analyst estimates and slowest revenue growth in the group. Interestingly, the stock is up 13.6% since the results and currently trades at $40.20.
Read our full analysis of IAC’s results here.
Ziff Davis (NASDAQ:ZD)
Originally a pioneering technology publisher founded in 1927 that became famous for PC Magazine, Ziff Davis (NASDAQ:ZD) operates a portfolio of digital media brands and subscription services across technology, shopping, gaming, healthcare, and cybersecurity markets.
Ziff Davis reported revenues of $328.6 million, up 4.5% year on year. This print topped analysts’ expectations by 1.4%. Taking a step back, it was a slower quarter as it produced a significant miss of analysts’ EPS estimates and full-year EPS guidance in line with analysts’ estimates.
The stock is down 2.3% since reporting and currently trades at $31.60.
Read our full, actionable report on Ziff Davis here, it’s free.
WEBTOON (NASDAQ:WBTN)
Pioneering a vertical-scrolling format optimized for mobile devices, WEBTOON Entertainment (NASDAQ:WBTN) operates a global platform where creators publish serialized web-comics and web-novels that users can read in bite-sized episodes.
WEBTOON reported revenues of $325.7 million, flat year on year. This number came in 1% below analysts' expectations. Overall, it was a softer quarter as it also produced a significant miss of analysts’ EPS estimates and revenue guidance for next quarter meeting analysts’ expectations.
The stock is flat since reporting and currently trades at $9.96.
Read our full, actionable report on WEBTOON here, it’s free.
Market Update
The Fed’s interest rate hikes throughout 2022 and 2023 have successfully cooled post-pandemic inflation, bringing it closer to the 2% target. Inflationary pressures have eased without tipping the economy into a recession, suggesting a soft landing. This stability, paired with recent rate cuts (0.5% in September 2024 and 0.25% in November 2024), fueled a strong year for the stock market in 2024. The markets surged further after Donald Trump’s presidential victory in November, with major indices reaching record highs in the days following the election. Still, questions remain about the direction of economic policy, as potential tariffs and corporate tax changes add uncertainty for 2025.
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