Market Overview

A Snapshot Of Snap Inc's First Earnings Report

A Snapshot Of Snap Inc's First Earnings Report

The tech earnings news flow continues to trickle in.

Following earnings from Facebook Inc (NASDAQ: FB) and Twitter Inc (NYSE: TWTR), the next keenly awaited social media earnings is from the newbie on Wall Street, Snap Inc (NYSE: SNAP).

Strong Demand, Decent Reception

Snap's Wall Street debut was March 2 after offering 200 million shares priced at $17 apiece, which was above the marketed $14–$16 price range. The company raised $3.4 billion in aggregate, making it the biggest social media IPO since Twitter.

The stock opened at $24, a 41-percent premium to the offer price, and touched a high of $26.05 and a low of $23.50 intraday before closing at $24.48, a 44-percent gain on the debut.

Snap's First Quarter As A Public Company

Snap, the parent of ephemeral photo and video sharing platform Snapchat, is set to release its first quarterly results as a public company, after the market closes on May 10.

Analysts, on average, expect the company to report a loss of $0.19 per share for the quarter, with estimates ranging between a loss of $0.61 and a loss of $0.06 per share. Revenues are expected at $158.08 million.

Snap Vs. Facebook Vs. Twitter

Projecting what we know in terms of Facebook's and Twitter's first ever quarterly results as public companies to Snap's, investors should brace for a loss but an increase in user statistics.

When Facebook delivered its first quarterly results as a public company in July 2012, it reported revenues of $1.18 billion, up 32 percent, with advertising revenues at $992 million.

The company posted a loss of $157 million or $0.08 per share compared to earnings of $159 million or $0.11 per share in the year-ago quarter. The headline results were better than what the Street had been anticipating.

It had about 955 million monthly active users, with 543 million being mobile users. This represented 29-percent year-over-year growth and a 6-percent sequential increase.

Daily active users totaled 552 million, up from 417 million in the year-ago period.

The stock fell 8.5 percent in reaction to the results.

Meanwhile, Twitter's first financial release as a public company was in February 2014, with the company reporting revenues of $243 million, up 116 percent year-over-year. Roughly 90 percent of the revenues were from advertising services.

Twitter reported a loss of $511 million, although excluding, one-time charges, the company reported a profit of $0.02 per share, belying expectations for a loss of $0.02 per share.

Twitter boasted monthly active user number of 241 million, up 30 percent year-over-year and 3.9 percent higher than in the previous quarter.

Snap's S-1 filing revealed that total revenues were at $165.68 million in the fourth quarter of 2016. Revenues for the first quarter of 2016 were at $38.80 million.

Daily active users totaled 158 million in the fourth quarter of 2016 and 122 million in the first quarter of 2016.

The company reported a loss of $104.58 million in the first quarter of 2016.

The company's user count growth has decelerated from the torrid pace of 415 percent seen in the March quarter of 2014 to 46 percent in the fourth quarter of 2016. The slowing growth could be blamed on Facebook's blatant copy of some of Snapchat's successful features, which surprisingly has done well for Facebook too.

Sell-Side Keen On Few Things

In a note released ahead of Snap's results, Wells Fargo analyst Peter Stabler said he is keen to get additional clarity on the company's plan on augmented reality, monetization plans, cloud expenses and thirty-party players.

How The Stock Has Fared Since IPO?

After spiking above the $27 on the next day of its listing, the stock has come off notably. Since then, it has been trading largely between $19.50 and $23 levels. Investors can take consolation from the fact that it has held support around $19.50, thereby holding above its $17 offer price.

SNAP Chart

Source: Y Charts

Average analysts' recommendation on the company's shares is a Hold and the average price target is $22.59, according to Yahoo Finance's database.

Related Links:

Snapchat Rakes In Ad Dollars, Emerges As Potent Threat To Facebook, Twitter

Stifel Initiates Snap Inc At Hold

Latest Ratings for SNAP

Nov 2019UpgradesHoldBuy
Oct 2019MaintainsNeutral
Oct 2019MaintainsOutperform

View More Analyst Ratings for SNAP
View the Latest Analyst Ratings

Posted-In: Peter Stabler Wells FargoAnalyst Color Earnings News Previews Analyst Ratings Trading Ideas Best of Benzinga


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