Shares of Snap Inc. (SNAP - Free Report) plummeted more than 20% in early morning trading to touch a new all-time low of $10.96 after the company’s latest quarterly earnings report disappointed investors on Tuesday afternoon.
Snap reported an adjusted loss of 17 cents per share, matching the Zacks Consensus Estimate and improving from a loss of 20 cents in the year-ago period. However, the company’s quarterly revenue was just $230.7 million, which missed our consensus estimate of $246.1 million and declined 19% on a sequential basis.
Management placed at least some of the blame for its sluggish sales picture on a controversial new app redesign that many investors and analysts warned would cause headwinds in the quarter.
This redesign may have also contributed to weak user growth, with daily active users gaining just 2% quarter over quarter and missing Street estimates (also read: Snap Shares Plummet After Weak Earnings, User Growth Misses Estimates).
Snap shares have since bounced slightly off their all-time lows, but the company is now feeling more pressure than it has seen since its IPO last year. Back then, investors questioned whether the young social media firm and its executive team—led by CEO Evan Spiegel—were ready to make the next step forward in their development.
In the immediate wake of Tuesday’s report, the prevailing sentiment in the “Fintwit” universe was one that pointed to confirmation of these concerns:
so the dancing hotdog wasn't the catalyst to turn things around? $SNAP
— StockCats (@StockCats) May 1, 2018
Snapchat: "Right now if we build a new feature, our code base is so complex, we tend to break another feature"$SNAP heading to singles. Theyve burned through a lot of money, a lot of time & still havent figured out the building blocks + big decel in ad rev coming
— The Daytrade™ (@d4ytrad3) May 1, 2018
Snapcrap is a better name, Don’t you think. $snap misses on every metric and its a disaster. We’ve been saying it since the IPO. Now down $2.5 AH to $11.79 ouch
— Ross Gerber (@GerberKawasaki) May 1, 2018
Today, after the stock touched new all-time lows, many investors were even more frustrated:
$SNAP sure glad I sold this loser months ago before I lost my shirt.
— John Yager (@John_Yager) May 2, 2018
$SNAP is too easy - joke of a company
— Robert Muncaster (@b_muncaster) May 2, 2018
My $snap short finally came thru. Thank youuuuuuuu
— CJB #RaisingBenjamin (@CJoeBlack) May 2, 2018
yes much rather hold $TWTR today then $SNAP to be obvious !
— Kevin Everett (@kevcol12) May 2, 2018
However, some Fintwit users were able to find some positive trends:
$SNAP added more $11's to my long position. Despite what grey haired analysts say, their kids are still using the app. In social media stocks the money always follows the attention. Why are ppl surprised they are losing $ - that is to be expected until 2020.
— PPP (@PennyPicks_Pro) May 2, 2018
I will say this about $SNAP- have thought/said since IPO it was more of a short than long- heading toward single digits, I have to take a re-look & watch for an inflection point next few Qs- my teens still use it all day/every day for their main communications app
— Chad Kusserow (@VetTechTrader) May 2, 2018
Bottom Line
Snap has found itself at a major impasse, with shares touching new lows and investors throwing in the towel on the app’s latest redesign. Add in the data privacy questions that have plagued other social media companies like Facebook and Twitter , and many investors would find no reason to buy Snap right now.
Nevertheless, an all-time low is often a unique buying opportunity for investors looking to make a rebound play. If Snap is not going to zero, it does not have too much further to fall and could generate positive momentum with new initiatives soon.
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Shares of Snap Inc. (SNAP - Free Report) plummeted more than 20% in early morning trading to touch a new all-time low of $10.96 after the company’s latest quarterly earnings report disappointed investors on Tuesday afternoon.
Snap reported an adjusted loss of 17 cents per share, matching the Zacks Consensus Estimate and improving from a loss of 20 cents in the year-ago period. However, the company’s quarterly revenue was just $230.7 million, which missed our consensus estimate of $246.1 million and declined 19% on a sequential basis.
Management placed at least some of the blame for its sluggish sales picture on a controversial new app redesign that many investors and analysts warned would cause headwinds in the quarter.
This redesign may have also contributed to weak user growth, with daily active users gaining just 2% quarter over quarter and missing Street estimates (also read: Snap Shares Plummet After Weak Earnings, User Growth Misses Estimates).
Snap shares have since bounced slightly off their all-time lows, but the company is now feeling more pressure than it has seen since its IPO last year. Back then, investors questioned whether the young social media firm and its executive team—led by CEO Evan Spiegel—were ready to make the next step forward in their development.
In the immediate wake of Tuesday’s report, the prevailing sentiment in the “Fintwit” universe was one that pointed to confirmation of these concerns:
Today, after the stock touched new all-time lows, many investors were even more frustrated:
However, some Fintwit users were able to find some positive trends:
Bottom Line
Snap has found itself at a major impasse, with shares touching new lows and investors throwing in the towel on the app’s latest redesign. Add in the data privacy questions that have plagued other social media companies like Facebook and Twitter , and many investors would find no reason to buy Snap right now.
Nevertheless, an all-time low is often a unique buying opportunity for investors looking to make a rebound play. If Snap is not going to zero, it does not have too much further to fall and could generate positive momentum with new initiatives soon.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot trades we're targeting>>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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