I should note that Wall Street has not always held a positive view of SNAP's stock.
Seeking Alpha Is SNAP A Good Investment Today? It is worth noting that even the lowest price target represents 30% upside. The average price target of $55 per share represents over 80% upside. Wall Street appears to view the stock as being undervalued, with an average buy rating of 4.35 out of 5.
That growth rate represents the strongest forecast among social media peers and suggests deep undervaluation considering where the stock is trading. SNAP guided for the next quarter to see revenue of between $1,030 million and $1,080 million, representing growth of 40%. Investors should welcome greater investment in growth even if it leads to depressed profit margins in the near term. My opinion is that profitability should not be over-emphasized as underlying growth rates will be a much more significant driver of shareholder returns. SNAP generated a strong 25% adjusted EBITDA margin and even showed a surprising 2% GAAP net margin. SNAP was also able to healthily grow average revenue per user to $4.06 on a global basis.Īnother strong point in the quarter was the company’s continued improvement in profit margins. Compare that to the stagnating numbers at FB. The most critical differentiating factor was its strong 20% growth in daily active users. This is the quarter which famously wiped out $200 billion of stock value from Meta ( FB) in one day, as social networking companies felt the pressures from iOS privacy changes. SNAP’s last quarter showed surprisingly strong revenue growth of 42%. This is the kind of stock that has traded at huge premiums to the growth sectors in recent years, yet now trades with substantial potential upside ahead. SNAP Stock PriceĪt recent prices SNAP is now trading a smidgeon above where it closed on its first day of trading five years ago (which was $24.48 per share). SNAP is clearly resonating with the younger audience, which should provide strong secular growth tailwinds for years if not decades to come. That has led the stock to trade at levels not too far from right before it reported those strong earnings. Yet the stock has plunged alongside the rest of tech amidst the broader tech crash. The company reported strong results in the latest quarters which easily set the tone for social networking peers. Snapchat ( NYSE: SNAP) is exactly the kind of stock investors should be flocking to in the current market.
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