Opinions of SNAP Stock

Snap (SNAP) stock has rebounded from its low levels during the market crash in March. The shares have recently gained their position after hitting the highest levels. Snapchat is the most common app for manipulation and enhancing the images and videos in different modes. The messages (snaps) can be shared with the other Snapchat users.

The first-quarter earnings report of Snap has shown a challenging outlook due to the world’s disruption by a coronavirus. The major challenge for the company has been the lack of advertisements which is the major revenue generation of the company. The initial phases of the corona outbreak were quite disturbing for the companies and many advertisers pulled back their digital marketing budget due to the tense economic situation. On the other side, the users always looked for something new to do while staying at home. Social media platforms like Snap, Twitter, Facebook, and others were used by the consumers for spending their surplus time.

Snapchat users increased

Q1 saw an increase in Snapchat users to 20% of its value (about 229M). Snap stock price also increased with a higher number of users. Q2 analysis was reported on July 21 and it was the time when the analysts found some downshift on the expectations. The growth became short of expectations. There was a slowdown from Q1 results. In the early phases of the corona outbreak, the people thought of getting entertained at home and this is why the Q1 numbers of the company were quite impressive.

The advertising leads of the company are still not much regained their previous position. The businesses are not on such good levels and hence, the advertisements are running low. Snapchat is highly dependent (98%) for its business through advertisements. The company raised its IPO in 2017 and came forward with the market valuation of $23.8B which is a good value among the tech companies. The company is coming up with the newest features to attract more people. The reality features to the platform are exclusive and in-demand especially among the audience less than 30 years of age. Snap Games were unveiled by the company to introduce something new for the audience.

Stock Analysis

The lowest price of SNAP stock was in March with a $7.89 value. After the Q1 earnings report, it became three times its original value. After quarter 2 reports, there was a loss of a few cents reported. The company reported a revenue of $454M after beating the estimates of $440M. The operating expenses of SNAP are increasing and the company is moving towards the economic profitability path. The investment recommendation from experts is almost neutral.

Snap stock is not under the sure-shot position to buy at the moment. The price is indeed low but the upcoming times don’t guarantee its increase. The stock is towards its 50-day moving average price and a little below it would be considered as low.

About Travis Garlick 1791 Articles
Been writing about and trading stocks since 2013. Manage a group of micro-cap investors on Facebook with over 15,000 members. Turned $8,500 into 185k the first year I started trading stocks and haven't looked back.