What to Expect When Snap Reports After the Close

Print Email

Snap Inc. (NYSE: SNAP) is scheduled to release its first-quarter financial results after the markets close on Tuesday. The consensus estimates from Thomson Reuters call for a net loss of $0.17 per share on $243.55 million in revenue. The same period of last year reportedly had a net loss of $0.20 per share on $149.65 million in revenue.

In its prior earnings announcement, Snap reported that its Snapchat social media platform grew from 158 million daily active users in the fourth quarter of 2016 to 187 million for the same period last year. That’s good, but barely in the same league as Facebook or Instagram.

In an effort to appeal to a wider audience, Snapchat released a new interface in February that did not go down well with its core users: young adults (18 to 29 years old). Nearly three-quarters of U.S. adults in that age group have a Snapchat account, compared with about a third of all U.S. adults with an account. It’s clear where the growth path is, but the question is whether Snapchat should take it.

By the numbers, 51% of all Snapchat users told Morning Consult in a survey that they prefer the old interface and that percentage soared to 63% among its young adult users. While it may take some time for the new interface to take hold, it’s not altogether clear that it will help.

Excluding Tuesday’s move, Snap had underperformed the broad markets, with its stock down about 36% in the past 52 weeks. In just 2018 alone, the stock was down about 2%.

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

  • Deutsche Bank has a Hold rating with a $15 price target.
  • Cowen has an Underperform rating with a $12 target.
  • Wedbush has a Hold rating and a $13 price target.
  • Credit Suisse has an Outperform with a $21 target price.
  • Morgan Stanley has an Underweight rating with a $12 target.
  • Monness Crespi & Hardt has a Neutral rating.

Shares of Snap were last seen down 3.2% at $13.87, with a consensus analyst price target of $15.42 and a 52-week range of $11.28 to $23.57.

I'm interested in the Newsletter