Why Snap Stock Is Diving Today

Snap Inc SNAP shares are trading lower Wednesday after the company reported fourth-quarter results and withheld forward guidance, citing "uncertainties related to the operating environment." Snap also noted that first-quarter revenue is down 7% quarter-to-date.

  • SNAP Q4 Revenue: $1.3 billion in line with estimates
  • SNAP Q4 EPS: $0.14 beat estimates of $0.11

Daily active users increased by 56 million, or 17% year-over-year, to 375 million. Snap said total time spent watching Spotlight content grew over 100% on a year-over-year basis.

Free cash flow totaled $78 million in the fourth quarter, down from $161 million in the prior year's quarter.

"We continue to face significant headwinds as we look to accelerate revenue growth, and we are making progress driving improved return on investment for advertisers and innovating to deepen the engagement of our community," said Evan Spiegel, CEO of Snap.

Outlook: Given uncertainties related to the operating environment, Snap held back revenue and adjusted EBITDA guidance for the first quarter. The company said it remains focused on expanding and diversifying its revenue growth. 

In a letter to shareholders, the company said it has observed a year-over-year revenue decline of approximately 7% quarter-to-date. Snap's internal forecast assumes first-quarter revenue will be down 2% to 10% on a year-over-year basis.

Related Link: Trading Strategies For Snap Stock Before And After Q4 Earnings

Analyst Assessment: 

  • UBS analyst Lloyd Walmsley downgraded Snap from Buy to Neutral and announced a $10 price target.
  • Rosenblatt analyst Barton Crockett maintained Snap with a Neutral and raised the price target from $8 to $10.
  • Barclays analyst Ross Sandler maintained Snap with an Overweight and lowered the price target from $18 to $15.
  • Susquehanna analyst Shyam Patil maintained Snap with a Neutral and raised the price target from $8 to $10.

See Also: Meta Platforms To Report Earnings After Closing Bell, Here's A Look At Recent Price Target Changes By The Most Accurate Analysts

SNAP Price Action: Snap has a 52-week high of $41.97 and a 52-week low of $7.33.

The stock was down 14.9% at $9.84 at the time of publication, according to Benzinga Pro.

Photo: Souvik Banerjee from Pixabay.

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