🐂 Not all bull runs are created equal. November’s AI picks include 5 stocks up +20% eachUnlock Stocks

Snap (SNAP) Stock Trades Up, Here Is Why

Published 10/16/2023, 03:06 PM
Updated 10/16/2023, 03:31 PM
Snap (SNAP) Stock Trades Up, Here Is Why
SNAP
-

What Happened: Shares of social network Snapchat (NYSE: SNAP) jumped 8.54% in the morning session after an internal memo from CEO Evan Spiegel cited the company is expecting to have more than 475 million daily active users (DAUs) in 2024, above the 447 million Wall Street was projecting. This report relieved investors as the advertising market has been weak and competition has been tough with the proliferation of AI solutions. According to Bernstein analyst Mark Schilsky, sentiment around the stock was "incredibly low" before this announcement, as Snap was one of the first advertising-focused companies to flag a demand downturn last year. We also note that in the last two years or so, Snap has reported some horrendous quarters that call into question the company's long-term viability. This announcement certainly shows there's some hope.

Is now the time to buy Snap? Find out by reading the original article on StockStory.

What is the market telling us: Snap's shares are quite volatile and over the last year have had 42 moves greater than 5%. In the context of that, today's move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business. The biggest move we wrote about over the last year was 6 months ago, when the company dropped 19.8% on the news that the company reported first-quarter revenue that missed analysts' revenue expectations, with both daily active users and revenue per user below expectations. EBITDA also missed. This marks the fifth straight quarter of topline revenue miss. SNAP’s business is likely experiencing company-specific issues, as advertising and social media peers have broadly reported fine to good results.

Snap is up 9.66% since the beginning of the year, but at $9.71 per share it is still trading 28.2% below its 52-week high of $13.51 from July 2023. Investors who bought $1,000 worth of Snap's shares 5 years ago would now be looking at an investment worth $1.34 thousand.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.