Since Snap Stock dropped once disappointing revenue, a lot of investors reportedly started breaking away from Snap, not reinvesting. According to the Reddit forum, the news about Snap Stock is rapidly popular, as it was that the stock’s biggest one-day share price deadline of 27% which followed the company’s third-quarter earnings report was not not well received.
If you have a plan to invest in Snap, you surely need to know the growth of Snap’s stock for some time and also predict how Snap’s stock will grow in the future. Then, is Snap’s Stock still worth buying? If you’re curious about Snap’s Stock, let’s find out the information about it through our post below!
Is Snap’s Stock Worth to Buy?
Even though Snap’s stock fell more than 20% once the company failed to hit a grand slam, it doesn’t mean that Snap has run out of room to run. According to Jefferies analyst Brent Thill, the Snap was chosen as one of the best metaverse stock plays because of technology leadership in augmented reality.
Reportedly, Snap’s stock price has rallied 166% over the previous 12 months, prior to its post-earnings plunge that was trading at more than 30 times this year’s sales. That’s why the investors should not be surprised if Snap’s stock decreases.
The Snap company actually continues to get the users, improve its bottom-line growth and command high ad prices. In this case, Snap’s advertisers must also adapt to Apple’s privacy changes gradually.
You may think that Snap is not currently a profitable business. However, Snap’s third-quarter 2021 fiscal results actually indicate that the Snap company is creating substantial progress towards profitability.
Reportedly, Snap’s quarterly net earnings loss of $72 million in Q3 2021. Even though it may sound bad, it represents a 64% year-over-year (YoY) improvement. If the Snap company will be able to maintain this trajectory, it can be imagined that the company can achieve earnings break-even next year.
There are a few other positive Q3 data points to ponder. Here are they:
-
- 306 million daily active users that are up to 23% YoY.
- Quarterly revenues of $1.067 billion that mark a 57% YoY improvement.
- Customized EBITDA totaling $174 million that signifies a whopping 209% YoY increase.
- About $52 million in free cash flow that is much better than the $70 million reported in the year-earlier quarter.
Why Does Snap’s Stock Go Down?
Many sources, especially stock’s analysts believed that Snap’s stock went down was simply caused by the stock’s high valuation and its overly bullish investor day forecast, instead of any fundamental issues with Snapchat’s business.
That’s why the investors who can withstand near-term volatility must still consider buying Snap stock, since the growth can accelerate again easily after the short-term drag wears off.
The revenue disappointment here refers to Apple’s policy where the company gives the device users the ability to choose out of activity tracking by the third-party apps. It was expected that the move actually hurts whose business models rely on serving targeted ads, they are most social media and other internet companies.
Furthermore, the Snap’s outlook was not terrible. However, when it proclaimed its revenue will grow approximately 50% annually over the next few years, the management probably set the bar too high during its investir day back in February.
What Does the Snap Company Attract the Investor?
The SNAP company, the creator of the Snapchat app is currently breaking new ground in the field of augmented reality. That’s in a good position to cash in when the metaverse develops. Because of augmented reality technology, that’s why Snap’s stock is still worth buying.
Furthermore, technologists actually describe the metaverse as the next-generation version of the internet. The metaverse can be defined as a shared, 3D virtual environment. With this technology, the people will be able to meet in a virtual world to engage in work activities, to simply visit friends, play games and many more.
It is known that a line of augmented reality Snap has is called Spectacles. This technology overlays digital images and other information into a person’s field of view. We can take the examples of the application for augmented reality technology including education, navigation, commerce, games and many more.
Augmented reality is not only entertaining, but it’s also a revenue driver. In addition to introducing Spectacles, Snap also recently introduced an augmented reality feature called ‘TrueSize’ that the users can use as a shopping experience.
Some companies that have used the ‘TrueSize’ feature is FarFetch (FTCH) where they allow the consumers to virtually try on and shop a variety of jackets. Aside from FarFetch, Nike (NKE) also has integrated this Snapchat’s technology as part of its ‘Play New’ advertising campaign.
What Snapchat Feature Does Attract Many Users?
The company of Snap calls itself a camera company which allows the users to enjoy their contents in photos and videos that can be changed in multiple ways. By downloading the Snapchat app to their smartphone, the users will have access to a wide range of features.
Snapchat’s users can also manipulate their content both photos and videos, into a 3D-animated cartoon. Certainly, they will feel different when they are using the Snapchat app than other social media platforms.
In addition to integrating their content into 3D-animated cartoons, the users can also discover and buy fashion items, play games, buy tickets, catch up on news and entertainment as well as sharing their content with other Snapchat users. Reportedly, Snap is continuously enhancing new features and partnerships with other companies.
Snap has brought together a long range of new products and services over the past few years. The services and products here include Snap Games, a live multiplayer gaming platform. They also added more augmented reality features to the Snapchat platform. Certainly, it expanded a line of original shows that are designed exclusively for its Snapchat audience. Last but not least, the Snap company also added a mapping feature into the app.
AUTHOR BIO
On my daily job, I am a software engineer, programmer & computer technician. My passion is assembling PC hardware, studying Operating System and all things related to computers technology. I also love to make short films for YouTube as a producer. More at about me…
Leave a Reply