Snap Inc: Here Is What You Need To Know Prior to Earnings Call Today

Carla Olson | 2:58 pm ET, 06 Feb 2018

Snap Inc. is reporting earnings today after market close. The report will be for the fourth quarter last year that ended in December 2017.  According to Finstead Research, SNAP price target upside is -7.36% (visit Finbot and type "SNAP upside"). 

Here is what you need to know about Snap Inc. 

Snapchat is enhancing its services by developing engagement features such as Geofilters and context cards to find information about geotagged places, and incorporating 3D Bitmoji World Lenses in collaboration with Jeff Koons, a prominent artist.   It is also removing its dependency on search engines. 

According to a market research firm eMarketer, Snapchat has a higher number of teen users compared to Facebook and Instagram.  Also, the introduction of the location-based map feature has caused a 40% surge in the submission of stories.

Its investment in advertisement measurement solutions, collaboration with NBC News and Time Warner and incorporation of ESPN’s SportsCenter to the platform will play a significant role in attracting new subscribers.

But there are a number of items that worry investors about Snap Inc. 

Facebook and Instagram have been very successful at mimicking Snapchat's features. 

The absence of revenue diversification is apparent and becomes even more pronounced with a 60% year-over-year reduction in ad unit costs (i.e., cost per thousand impressions).

Snap spent roughly $40 million on the hardware product called Spectacles, which went nowhere. 

Also, Snap is not making significant efforts to attract an older generation.  It is competing head-to-head with Amazon Prime, Netflix, Hulu and Time Warner’s HBO in the video streaming market; however, its competitive advantages are unclear to investors.  

Disclaimer: The news article above expresses the author’s opinion about the topic of the article. We strongly advise you not to base your investment decisions just on this article alone. If you’d like to become a writer for Finstead Bites, please send us an email at hi@finstead.com.


2017 IPOs: Dragged Down by Snap and Blue Apron?

Carla Olson | 2:03 am ET, 20 Dec 2017

Renaissance Capital released a report on the state of 2017 Initial Public Offerings (IPOs).  The 2017 IPO market was significantly more prolific than the one in 2016, but definitely not as good as the one in 2014. 

There are two IPOs that unfortunately took the market in a negative direction: Blue Apron (NYSE: APRNand Snap (NYSE: SNAP). 

Here are some interesting stats from Renaissance Capital about 2017 IPOs:

  • There were 160 public offerings in 2017, raising a total of $35.6B vs. 105 IPOs with $18.8B raised in 2016 and 275 IPOs with $85.3B raised in 2014
  • For tech, there were 37 IPOs in 2017 that raised $9.9B vs. 21 IPOs in 2016 that raised $2.9B and a total of 56 IPOs in 2014 that raised $32.9B.

The average IPO returned 21% in 2017 (vs. Dow Jones up 17%, Nasdaq up 12% and S&P 500 up 11%).

35 of those 160 IPOs in 2017 came from overseas, led by 15 from China. To the degree that companies are getting to the public markets, more of the benefits are flowing outside the U.S.

Below is the view of the APRN stock move; in the last 3 months, the stock lost 24% in value.  

Blue Apron APRN

The SNAP stock didn't do much better either.  Since its IPO, SNAP lost more than 34% in value.  

SNAP stock

Disclaimer: The news article above expresses the author’s opinion about the topic of the article. We strongly advise you not to base your investment decisions just on this article alone. If you’d like to become a writer for Finstead Bites, please send us an email at hi@finstead.com.


Snap Inc. (SNAP) Buy or Sell Stock Guide

Updated at: 6:10 pm ET, 13 Nov 2018

The analysis below may be helpful to you if you have any of the following questions about SNAP stock:

  • Is SNAP a buy or a sell?
  • Should I sell or hold SNAP stock today?
  • Is SNAP a good buy / a good investment?
  • What are SNAP analyst opinions, recommendations, ratings?

Here are SNAP stock buy reasons/signals:

1. Snapchat has added a number of features such as 3-D Friendmoji Deluxe World Lens, Bitmoji Deluxe, Context Cards, Stories in Search, 3D World Lens, Custom Stories, Snap Maps and Geofilters to make its platform more attractive to users as well as advertisers. The company recently collaborated with artist Jeff Koons to unveil an art platform and rolled out 3D Bitmoji World Lenses. With the addition of the Context Cards feature, users are able to view information related to the places that are geotagged to the images or videos uploaded on the application.

2. Snapchat is the most preferred social networking medium among teens, per Piper Jaffray’s 34th semi-annual Taking Stock with Teens survey. Reportedly, 47% of the respondents (with average age of 16 years) said that they prefer using Snapchat compared with 12% respondents in the fall 2016 survey. Per an October report by Axios, Snap witnessed a 40% increase in increase in submission of Stories since it unveiled its location based Map feature in June 2017. This bodes well for the company as user engagement holds the key to attracting advertisers, which is the primary source of revenues for Snap.

3. Advertising is the primary source of revenues for Snap. Snap’s transition to automated or programmatic auction of Snap Ads is driving its advertising revenues. The company’s advertising products include Snap Ads and Sponsored Creative Tools like Sponsored Lenses and Sponsored Geofilters.

4. Snap is aggressively ramping up its original content efforts. The company partnered with NBC News to produce a twice-daily headline news show Stay Tuned for the Snapchat app in a bid to reach the highly sought-after millennial cohort. Moreover, the company also inked a $100 million content deal with media giant, Time Warner Inc.

5. SNAP stock price ($6.58) is close to the 52-week low ($5.86). Perhaps now is a good time to buy?

6. SNAP quarterly revenue growth was 44.40%, higher than the industry and sector average revenue growth (8.94% and 5.22%, respectively).

7. SNAP average analyst price target ($11.96) is above its current price ($6.58).

Here are SNAP stock sell reasons/signals:

1. Competition from Facebook poses a serious threat to the company. Facebook’s strategy of mimicking Snapchat features on its platforms to boost user growth and engagement levels has paid off. The company even succeeded in making them more popular than Snapchat.

2. Lack of revenue diversification is another major concern for Snap. The company currently has only one major source of revenues i.e advertising. Continuous decline in price per ad impression has raised concern among investors.

3. Lackluster user growth remains the primary concern for investors. The company’s problem has been its sole focus on the younger demographic. The company undoubtedly is quite popular among that demography but the failure to attract the older generation (above 34 year olds) has been a major headwind.

4. In the video streaming market, the company faces stiff competition from established players like Amazon Prime, Netflix, Hulu and Time Warner’s HBO. Given the high growth opportunity in the video streaming market, the players are ramping up their efforts to boost subscriber base. The companies are undertaking a number of initiatives such as investing more in regional programming and making more kids and family oriented content in a bid to gain an edge.

5. SNAP short interest (days to cover the shorts) ratio is 4.77. The stock garners more short interest than the average industry, sector or S&P 500 stock.

What are your thoughts on SNAP?

If you liked this analysis, check out Buy or Sell Stock Guides for other stocks.

Disclaimer: The news article above expresses the author’s opinion about the topic of the article. We strongly advise you not to base your investment decisions just on this article alone. If you’d like to become a writer for Finstead Bites, please send us an email at hi@finstead.com.


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