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Snap (SNAP) Stock Sinks As Market Gains: Here's Why

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Snap (SNAP - Free Report) ended the recent trading session at $15.87, demonstrating a -0.13% swing from the preceding day's closing price. This change lagged the S&P 500's daily gain of 1.25%. Elsewhere, the Dow gained 0.97%, while the tech-heavy Nasdaq added 1.3%.

Shares of the company behind Snapchat witnessed a gain of 0.7% over the previous month, trailing the performance of the Computer and Technology sector with its gain of 2.42% and the S&P 500's gain of 1.58%.

Analysts and investors alike will be keeping a close eye on the performance of Snap in its upcoming earnings disclosure. The company's earnings report is set to go public on February 6, 2024. On that day, Snap is projected to report earnings of $0.07 per share, which would represent a year-over-year decline of 50%. Simultaneously, our latest consensus estimate expects the revenue to be $1.39 billion, showing a 6.69% escalation compared to the year-ago quarter.

Investors should also pay attention to any latest changes in analyst estimates for Snap. These revisions typically reflect the latest short-term business trends, which can change frequently. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system, ranging from #1 (Strong Buy) to #5 (Strong Sell), possesses a remarkable history of outdoing, externally audited, with #1 stocks returning an average annual gain of +25% since 1988. Over the past month, there's been a 0.38% rise in the Zacks Consensus EPS estimate. Snap is holding a Zacks Rank of #3 (Hold) right now.

In the context of valuation, Snap is at present trading with a Forward P/E ratio of 114.41. Its industry sports an average Forward P/E of 32.99, so one might conclude that Snap is trading at a premium comparatively.

Also, we should mention that SNAP has a PEG ratio of 8.29. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. As of the close of trade yesterday, the Internet - Software industry held an average PEG ratio of 1.65.

The Internet - Software industry is part of the Computer and Technology sector. With its current Zacks Industry Rank of 76, this industry ranks in the top 31% of all industries, numbering over 250.

The Zacks Industry Rank assesses the vigor of our specific industry groups by computing the average Zacks Rank of the individual stocks incorporated in the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


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