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Snapchat Introduces GIF Stickers to Snaps & Adds Tab Feature

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Snap (SNAP - Free Report) is introducing GIF — Graphic Interchange Format — stickers on its messaging application Snapchat by collaborating with Giphy. The GIF stickers will be available in the Sticker Picker menu of the application, reports TechCrunch.

Snapchat also introduced a Tab feature on the Friends and Discover pages of the application that will enable users to easily sort the Stories that they wish to see.

We believe the new tools and features will help the company combat all odds and boost engagement and user growth.

Snapchat Banks on Redesign to Drive Growth

We note that Snapchat’s recent redesign has not gone down well with users and is a headwind for the business. An online petition with more than a million signatures was filed in order to get users back to the old application.

Notably, shares of Snap dropped 9.1% to close at $18.57 on Feb 20. Moreover, shares of Snap have lost 22.7% of their value since its listing date of Mar 2, 2017 against 29.1% growth of its industry.

 



CEO Evan Spiegel defended the redesign decision at the Goldman Sachs Internet & Technology Conference last week saying that it will take time for people to accept the change. He has immense faith in the long-term benefits of the redesign and believes it will “provide a strong foundation for the evolution of our business.”

We believe introduction of the Tab feature is a step toward that direction. It will make the platform easier and simpler to use.

Interestingly, for the first time, Snapchat seems to be following the footsteps of archrival Facebook’s photo sharing app Instagram, which has earlier copied Snapchat features and made them more popular. Instagram Stories, which is a copy of Snapchat’s feature of the same name, has more than 300 million daily active users (DAUs), while Snapchat has 187 million DAUs.

Instagram rolled out GIF on Stories last month. Developed around 30 years ago, GIF is currently one of the biggest marketing trends. Given its increasing popularity, social media services are also expanding its usage. Facebook added the feature back in 2015 in Status Bar and extended the same to other sections eventually.

We note that growth of Stories is phenomenal and currently Instagram and WhatsApp are the top two “most used Stories product in the world”, per Facebook’s CEO Mark Zuckerberg. We believe introduction of GIF is a positive for Snapchat as it will help increase user engagement and withstand intensifying competition.

Snap Inc. Revenue (TTM)

Snap Inc. Revenue (TTM) | Snap Inc. Quote

Zacks Rank & Stocks to Consider

Snap carries a Zacks Rank #3 (Hold).

Better-ranked stocks in the broader technology sector include Lam Research (LRCX - Free Report) and Paycom Software (PAYC - Free Report) , both sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings growth rate for Lam Research and Paycom Software is projected to be 14.9% and 25.8%, respectively.

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