Munster Not Concerned About Meta And Google Despite Snap's Disappointing Q3: 'Long-Term Will Be Intact'

Zinger Key Points
  • Snap's revenue weakness is attributable to a quartet of factors, Loup Funds' Gene Munster says.
  • The analyst is hopeful things won't be as bad as Snap for ad-dependent Facebook and Google.
Munster Not Concerned About Meta And Google Despite Snap's Disappointing Q3: 'Long-Term Will Be Intact'

Snap Inc. SNAP shares tumbled about 27% following the release of its third-quarter results.

What Went Wrong At Snap: Four headwinds — ad market softness, monetization method, Apple Inc. AAPL privacy changes and competition from TikTok — have worked in unison, weighing down the Snapchat parent’s topline growth, Gene Munster, managing partner at Loup Funds, said.

The analyst noted that Snap's revenue growth has slowed from 38% in the March quarter to 13% in the June quarter and 7% in the September quarter. The stock has priced in negative revenue growth for the March quarter, he added.

See Also: How To Trade Snap Stock Before And After Q3 Earnings Print

Read-Across For Peers: Munster said he isn't very concerned about Alphabet Inc. GOOGL GOOG and Meta Platforms Inc. META, which will report on Tuesday and Wednesday, respectively. He added this was because only some of the headwinds that affected Snap apply to these companies.

“Even if things are bad next week, I still believe the long-term will be intact,” he said.

Credit Suisse analyst Stephen Ju said in an early October report that digital ad trends generally have seen a sequential improvement in the third quarter. Entertainment and commerce verticals, to which Snap has the greatest exposure, underperformed the broader online ad environment, he added.

Price Action: Snap closed Thursday’s session down 0.64% at $10.79 and plunged 27.06% in after-hours trading, according to Benzinga Pro data. In after-hours, Meta was down 3.95% at $126.33, Alphabet retreated 1.88% to $98.09 and Pinterest Inc. PINS fell 7.14%.

Read Next: How To Buy Technology Stocks Right Now

Posted In: Credit SuisseGene MunsterLoup FundsSnapChatAnalyst ColorEarningsNewsSocial MediaAnalyst RatingsTrading IdeasGeneral