Back to top

Image: Bigstock

Snap (SNAP) Gains But Lags Market: What You Should Know

Read MoreHide Full Article

Snap (SNAP - Free Report) closed at $18.25 in the latest trading session, marking a +0.33% move from the prior day. The stock lagged the S&P 500's daily gain of 0.84%. Meanwhile, the Dow gained 0.92%, and the Nasdaq, a tech-heavy index, added 1.06%.

Prior to today's trading, shares of the company behind Snapchat had gained 20.38% over the past month. This has outpaced the Computer and Technology sector's gain of 6.54% and the S&P 500's gain of 3.95% in that time.

Investors will be hoping for strength from SNAP as it approaches its next earnings release, which is expected to be February 4, 2020. In that report, analysts expect SNAP to post earnings of $0 per share. This would mark year-over-year growth of 100%. Our most recent consensus estimate is calling for quarterly revenue of $560.39 million, up 43.75% from the year-ago period.

It is also important to note the recent changes to analyst estimates for SNAP. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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 ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.77% higher within the past month. SNAP is holding a Zacks Rank of #2 (Buy) right now.

Valuation is also important, so investors should note that SNAP has a Forward P/E ratio of 818.55 right now. For comparison, its industry has an average Forward P/E of 56.99, which means SNAP is trading at a premium to the group.

The Internet - Software industry is part of the Computer and Technology sector. This industry currently has a Zacks Industry Rank of 102, which puts it in the top 40% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow SNAP in the coming trading sessions, be sure to utilize Zacks.com.


See More Zacks Research for These Tickers


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


Snap Inc. (SNAP) - free report >>

Published in