A Little Bit of Kindness Can Go a Long Way with Nextdoor
Some folks would say that social media has made people impersonal, or even anti-social. One business that’s seeking to remedy that situation is California-based Nextdoor (NYSE:KIND). If you like the company’s vision and prospects, then you might consider a position in KIND stock.
What’s interesting about Nextdoor is its truly unique approach to social media. Sure, we all have tech tools at our fingertips, but the Covid-19 pandemic reminded many of us of the importance of human connection.
Sadly, that connection was sometimes lost due to Covid-19 lockdowns over the past year and a half. It certainly would be nice to have a tool that could connect us with our neighbors and make “social” media social again.
Such a tool exists and Nextdoor is uncovering new ways to bring people closer together, even amid a pandemic. So, just maybe, a thriving business can be built upon a human-centered neighborhood network — just what the world needs now, I’d say.
A Closer Look at KIND Stock
Nextdoor became a publicly traded business following the close of its merger with special purpose acquisition company (SPAC) Khosla Ventures Acquisition Co. II.
Trading as KIND stock, Nextdoor shares debuted for public trading on Nov. 8. It was an auspicious start as the stock closed at $13.01 that day, up 17%.
This is still a new stock and it’s difficult to determine a price range this early in the game. There does seem to be some price discovery in progress, however, as the Nextdoor share price settled at $12 or $13 for two weeks after the stock’s debut.
Hence, if KIND stock is trading near $12, this could be a good entry point for a long position.
They Came and Stuck Around
As InvestorPlace contributor William White concisely summed it up, Nextdoor is a social media platform, but with a twist.
With so many apps out there, it’s essential for a social media business to be unique. What makes Nextdoor unique is that instead of encouraging its users to interact with just anyone online, it focuses on people living near each other. Thus, Nextdoor seeks to foster kindness between users by allowing neighbors to cultivate relationships in the real world through a social platform. It’s a timely business concept in an era when so many people feel isolated and crave human connection.
Nextdoor’s investor presentation observes that nearly half of people (according to a poll) are still working from home. The implication here is that social interaction is lacking and the ability to connect with one’s neighbors could offer a solution.
Nextdoor CEO Sarah Friar explained how, even many months after the onset of the Covid-19 pandemic, Nextdoor’s appeal remained strong. “More people came to the platform during the middle of an emergency, but they came and they stuck around,” Friar said.
Connecting People, and Generating Revenues
Indeed, they did stick around and Nextdoor’s reach is growing quickly. Believe it or not, the platform is available in 11 countries and 280,000 neighborhoods globally. Plus, Nextdoor has a presence in “nearly 1 in 3 U.S. households.” That’s astonishing if you really think about it.
The billion-dollar question for prospective investors, though, revolves around whether Nextdoor is a profitable enterprise. Unfortunately, profitability currently eludes Nextdoor.
During the third quarter of 2021, the company generated $52.7 million, representing a 66% year-over-year increase. Furthermore, Nextdoor’s average total global weekly active users increased by 20% year-over-year, to 33 million. However, the company posted a net earnings loss of $19 million during that same quarter.
It’s evident that Nextdoor is a strong revenue generator and can grow its user count. The company’s primary goal going forward should be to focus on turning a profit.
The Bottom Line
There are plenty of social media apps today, but Nextdoor isn’t like all the others.
Connecting neighbors through technology is a timely business concept as Covid-19 has left many people feeling disconnected and isolated.
Hopefully, Nextdoor will be able to achieve profitability in the near future. In the meantime, feel free to consider KIND stock as an investment in the future of high-touch, people-centered social media.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
David Moadel has provided compelling content – and crossed the occasional line – on behalf of Crush the Street, Market Realist, TalkMarkets, Finom Group, Benzinga, and (of course) InvestorPlace.com. He also serves as the chief analyst and market researcher for Portfolio Wealth Global and hosts the popular financial YouTube channel Looking at the Markets.
