Investing.com – Shares of Snap closed lower on Tuesday, after digital marketing firm eMarket said Snap's ad revenue will be $30 million lighter in 2017 due to higher than expected revenue sharing with its advertising partners.
Parent company of Snapchat, Snap Inc (NYSE:SNAP) is expected to grow ad revenue in 2017 to $770 million, up 157% from last year, but it’s below eMarket’s previous forecast in September of $800 million.
The weaker outlook for ad revenue growth, added to recent concerns about Snap’s near-term financial future, after several analysts initiated coverage with a “sell” rating on the social media company’s shares.
According to Snap’s initial public offering filling, Snapchat, Snap’s main service, has a user base of 158 million people, who send 2.5 billion messages every day and spend 30 minutes on it per day.
A large chuck of Snap’s revenue comes from advertisers seeking to leverage the social media company’s popularity with Millennials.
But despite the strong-user base and high user engagement, the company is yet to profit from its popularity, as it posted $515 million loss in 2016.
"For the year ended December 31, 2016, we incurred a net loss of $514.6 million, as compared to a net loss of $372.9 million for the year ended December 31, 2015," snap’s IPO filing read.
At its closing price of $20.58, Snap's shares have tumbled 30% from its peak of $29.44 on March 3.