Back to top

Image: Bigstock

Snap (SNAP) Gains As Market Dips: What You Should Know

Read MoreHide Full Article

In the latest close session, Snap (SNAP - Free Report) was up +2.41% at $8.07. The stock outpaced the S&P 500's daily loss of 0.14%. Elsewhere, the Dow saw a downswing of 0.2%, while the tech-heavy Nasdaq depreciated by 0.24%.

The company behind Snapchat's shares have seen an increase of 3.14% over the last month, surpassing the Computer and Technology sector's gain of 0.2% and the S&P 500's gain of 0.94%.

The investment community will be paying close attention to the earnings performance of Snap in its upcoming release. It is anticipated that the company will report an EPS of $0.15, marking a 6.25% fall compared to the same quarter of the previous year. Simultaneously, our latest consensus estimate expects the revenue to be $1.7 billion, showing a 9.12% escalation compared to the year-ago quarter.

Regarding the entire year, the Zacks Consensus Estimates forecast earnings of $0.32 per share and revenue of $5.91 billion, indicating changes of +10.34% and +10.31%, respectively, compared to the previous year.

Additionally, investors should keep an eye on any recent revisions to analyst forecasts for Snap. Such recent modifications usually signify the changing landscape of near-term business trends. Therefore, positive revisions in estimates convey analysts' confidence in the business performance and profit potential.

Our research demonstrates that these adjustments in estimates directly associate with imminent stock price performance. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system, stretching from #1 (Strong Buy) to #5 (Strong Sell), has a noteworthy track record of outperforming, validated by third-party audits, with stocks rated #1 producing an average annual return of +25% since the year 1988. Within the past 30 days, our consensus EPS projection remained stagnant. Snap presently features a Zacks Rank of #2 (Buy).

Looking at valuation, Snap is presently trading at a Forward P/E ratio of 24.63. For comparison, its industry has an average Forward P/E of 28.78, which means Snap is trading at a discount to the group.

Investors should also note that SNAP has a PEG ratio of 1.14 right now. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. By the end of yesterday's trading, the Internet - Software industry had an average PEG ratio of 1.85.

The Internet - Software industry is part of the Computer and Technology sector. At present, this industry carries a Zacks Industry Rank of 62, placing it within the top 26% of over 250 industries.

The Zacks Industry Rank evaluates the power of our distinct industry groups by determining the average Zacks Rank of the individual stocks forming the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Ensure to harness Zacks.com to stay updated with all these stock-shifting metrics, among others, in the next trading sessions.


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


Snap Inc. (SNAP) - free report >>

Published in