Can Snapchat Turn Itself Around With Earnings?

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Snap Inc. (NYSE: SNAP) is scheduled to release its second-quarter financial results after the markets close on Thursday. The consensus estimates from Thomson Reuters call for a net loss of $0.15 per share and $186.22 million in revenue.

In its IPO the stock priced at $17 a share, above the expected price range, and it got a first-day pop of 44% before closing that week up 59%. The company’s market cap at the IPO price was just over $24 billion, but it ended the week north of $31 billion. However, that’s only a snapshot of the IPO.

Since its March initial public offering, Snap has watched its share price fall by nearly 45%. The market cap is now right around $16 billion.

What happened can be summed up in one word: Facebook Inc. (NASDAQ: FB). The social media giant, which paid $1 billion for Instagram in 2012, succeeded in protecting that investment by cloning Snap’s features nearly as soon as the smaller company announced a new one.

Snapchat, the company’s signature application, remains wildly popular but still trails Instagram in the number of daily active users by a score of 250 million to 166 million. Can Snap fight off its much larger competitor and return to its former glory? It pretty much has to, but how patient will investors be?

A few analysts weighed in on Snap ahead of the report:

  • RBC has an Outperform rating with a $31 price target.
  • Drexel Hamilton has a Buy rating with a $30 price target.
  • Deutsche Bank has a Buy rating with a $20 price target.
  • Summit Redstone has a Sell rating with a $10 price target.
  • Cleveland Research has a Neutral rating.
  • Wells Fargo has a Market Perform rating.
  • Cowen has a Market Perform rating.
  • Stifel has a Hold rating.
  • Piper Jaffray has a Neutral rating.
  • Barclays has an Equal Weight rating.

Shares of Snap were last seen at $13.52, with a consensus analyst price target of $19.05 and a post-IPO range of $11.90 to $29.44.