![]() That said, we view SNAP as a paper airplane in a windstorm and is not a phenomenal barometer for the pace of the digital ad slowdown for platforms like Facebook/Meta, Google, and other digital ad players. “In a shaky macro there will be many casualties as a slower spending environment is on the horizon with darker storm clouds. The missed earnings drove Wedbush Securities analyst Dan Ives to deem the quarter “another train wreck,” which highlights a digital ad slowdown, Apple iOS privacy headwinds and TikTok competition further heating up, according to a note sent to GOBankingRates: Live Richer Podcast: First-Time Homebuying During Inflation: Is It Worth It?ĭiscover: Which Stocks Are the Best To Invest in During Inflation? Snap also said that it intends to “substantially” slow its rate of hiring, as well as the rate of operating expense growth and reprioritize its investments. Experts we’ve spoken with have told us that Snap’s focus and reliance on larger brand advertisers have made it more vulnerable to related budget cut-backs.” “Times are tough for Snap and it remains to be seen if competitors and peers are seeing similar things. ![]() In the first quarter they surged 38%,” Kessler said in a note sent to GOBankingRates. This indicates not only challenges in terms of demand, but also in forecasting demand. According to 49 analysts, the average rating for SNAP stock is 'Buy.' The 12-month stock price forecast is 16.17, which is an increase of 44.38 from the latest price. “Snap’s second-quarter results were disappointing, in large part because they missed expectations even after negatively pre-announcing. Scott Kessler, Global Sector Lead for Technology Media and Telecommunications at Third Bridge, said that not providing guidance was also of significance, as it makes sense for Snap to be overly conservative, especially given investor sentiment around the company. The company also said that it won’t provide financial guidance for the third quarter, as “forward-looking visibility remains incredibly challenging, and it is unclear how the headwinds we observed in Q2 will evolve as we move through Q3,” according to the shareholders’ letter. “While the growth trajectory for ad spend across the social media space has come to a halt, we believe SNAP remains better positioned than most to monetize the platform long term given healthy user engagement levels, an attractive installed base/young audience, and efforts in AR,” Zino wrote. The stock is down 64.9% year-to-date.įollowing the earnings release, CFRA Research said it maintained a Hold opinion on the stock and reduced the 12-month price target on the shares to $15 from $18.Īngelo Zino, senior equity analyst at CFRA Research, wrote in a note sent to GOBankingRates that “we are growing more concerned about business prospects given macro issues and rising competitive pressures, which is hurting advertiser budgets and creating lower bids per action.” Snap shares closed up 5% on July 21, but tumbled more than 26% in after-hours trading on the results, according to The Wall Street Journal. “We are evolving our business and strategy to reaccelerate revenue growth, including innovating on our products, investing heavily in our direct response advertising business, and cultivating new sources of revenue to help diversify our topline growth.” “While the continued growth of our community increases the long-term opportunity for our business, our financial results for Q2 do not reflect our ambition,” Evan Spiegel, Snap CEO, said in the earnings release. Looking To Diversify in a Bear Market? Consider These 6 Alternative Investments Learn: How To Invest Like a Millionaire During a Bear Market If it cannot, and it continues burning through cash at its current rate, the analysts say Snap's coffers will be empty by the summer of 2019.Snap shares were down 38.89% on July 22, following disappointing second-quarter earnings – a quarter which “proved more challenging than we expected,” according to a July 21 letter to investors. Snap has been losing upward of $300 million every quarter since it went public in March 2017 - and the company may need to raise cash as early as next year. ![]() In a lengthy memo, Spiegel acknowledged that the company "rushed" its redesign and set a goal of breaking even in the fourth quarter of this year and turning a profit in 2019.īut next year may not be soon enough, according to some analysts. The company has continued losing money since its initial public offering, but CEO Evan Spiegel recently outlined a plan, leaked earlier this month, to be profitable by 2019. The decline marks a 70 percent drop since Snap went public at $24 a share in March 2017 and a 74 percent fall from the stock's brief peak price of $27 a few weeks later. The parent company of Snapchat sunk to $7.04 a share shortly after 11 a.m. Shares of Snap reached all-time lows Tuesday on the heels of reports that the social media company is running out of cash.
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