Snap Share Forecast February 2022 – Time to Buy SNAP?
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Shares of American camera and social media company Snap (NYSE: SNAP) are in the green today after closing at $40.28 as of February 9th (19:59 EST). Snap shares enjoyed a surge after the company released its fourth-quarter earnings report. But overall the shares are still down by for the year and 53% below their all-time high of $83.34 from last September.
Snap – Technical Analysis
According to the financial statement released by Snap indicates that the market cap is at $65.427 billion with total assets worth $7.536 billion. Revenue for 2021 was at $4.12 billion with a profit margin of -11.85% compared to $2.51 billion in 2020.
Moving averages such as Exponential Moving Average (10)(35.38), Simple Moving Average (10)(33.61), Exponential Moving Average (20)(35.85), Simple Moving Average (20)(34.21) and Exponential Moving Average (30)(37.56) are indicating a buy action. Oscillators such as Stochastic RSI Fast (3, 3, 14, 14)(96.81), Williams Percent Range (14)( −2.27), Bull Bear Power(7.01)and Ultimate Oscillator (7, 14, 28)(58.19) are neutral.
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Recent Developments
Snap was launched on September 16, 2011, by Evan Spiegel and Bobby Murphy upon the relaunch of Picaboo as Snapchat. According to Snap’s fourth-quarter revenue increased by 42% year over year to $1.3 billion, which beat expectations by $100 million. Other positive metrics include DAUs which grew 20% to 319 million and its average revenue per user (ARPU) which rose 18%. The company has expected its revenue to grow 28% to 32% year over year in the fourth quarterback in October last year. The company blamed the slowdown on Apple’s privacy update on iOS. This has enabled its users to opt-out of data tracking features across all apps.
As a result of this, various advertisers on the company’s platform tweaked their advertising campaigns to cope with Apple’s changes. Snap has also reduced its dependence on third-party data and targeted ads, by expanding its first-party data and measurement platforms (such as Snap Pixel). Additionally, it has also launched multi-platform ads that enabled its advertisers to deploy a single set of ads across multiple ad formats. For the next quarter, management expects revenue to increase its revenue to grow 34% to 40% year over year, which also exceeds analysts’ expectations for 32% growth.
Snap generated a net profit of $22.5 million. This represents a significant improvement from a net loss of $113.1 million a year earlier. The maximum growth in this sector came as a result of its investment portfolio and lower interest expenses related to its convertible notes. Its operating loss becomes $25.1 million if we exclude those gains. On the other hand, the company’s net income of $359.5 million, which is an increase of 164% crushed estimates by $0.12.
Recent Developments
Snap could generate its first full year of positive operating cash flow and free cash flow due to Snap’s expanding margins and improving profitability. Its earnings report looks a lot better than Meta’s. Snap shares are trading at about eleven times its 2022 sales. But Snap shares aren’t cheap as they are trading at 75 times its non-GAAP earnings for 2022. While its GAAP losses should continue to grow, the company’s margins should keep expanding.
Snap is a good growth stock for investors in such a placid market. As the formidable macro headwinds continue to batter high-growth tech stocks with slim GAAP margins, it is recommended to not buy the shares and add them to your watchlist for the time being.
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