Snap (SNAP) Stock Trades Up, Here Is Why

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.