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Snap Inc. (SNAP) Stock Guide

September 19, 2020
25
Bull Case
  • Revenue growth higher than the industry and sector averages
  • Cash/Debt ratio is higher than the industry and sector averages
Bear Case
  • Forward P/E ratio high relative to industry peers
  • Forward P/B ratio high relative to industry peers
  • Forward P/S ratio high relative to industry peers
  • High short share of float
  • High short interest
  • Enterprise Value/Revenue ratio low relative to industry peers

Before we start: if you're looking for SNAP stock price, you can quickly find it out by visiting Finny and typing "SNAP quote". If you're looking for a quick scoop on SNAP stock (chart, price target, market cap, news and buy or sell analysis), go to Finny and look for "SNAP". You'll get all this info in one place. Or you can just type "SNAP news" to get the latest stock news.

Looking to buy or sell Snap Inc. (SNAP)? Interested in getting the full scoop on SNAP, including earnings and dividends, stock forecast, buy or sell analysis and key stats? If so, you came to the right place.

In this SNAP stock guide, we'll address key questions about SNAP, above and beyond what you can find on Yahoo Finance, Zacks, MarketWatch or Morningstar.

Here is what you'll be able to find in this guide:

Earnings and Dividends: earnings, earnings date, dividend rate and dividend yield;
Analyst Predictions: stock forecast and analyst ratings;
Analysis: Finny Score and buy or sell analysis;
Key Stats: revenue, market cap, revenue growth, profit margin, P/E ratio, P/B ratio, industry, sector, and number of employees.

And here is the list of questions we'll answer:
1. What are SNAP earnings?
2. What is SNAP stock forecast (i.e., prediction)?
3. SNAP buy or sell? What is SNAP Finny Score?
4. What are the reasons to buy SNAP? Why should I buy SNAP stock?
5. What are the reasons to sell SNAP? Why should I sell SNAP stock?
6. What are SNAP key stats: revenue, market cap, revenue growth, profit margin, P/E ratio, P/B ratio industry, sector, and number of employees?

So let's start. Scroll down to the question that interests you the most.

Earnings and Dividends

1. What are SNAP earnings?

SNAP trailing 12-month earnings per share (EPS) is -$0.78.

Analyst Predictions

2. What is SNAP stock forecast (i.e., prediction)?

Based on SNAP analyst price targets, SNAP stock forecast is $25.96 (for a year from now). That means the average analyst price target for SNAP stock is $25.96. The prediction is based on 36 analyst estimates.

The low price target for SNAP is $17.00, while the high price target is $31.00.

SNAP analyst rating is Hold.

Analysis

3. SNAP buy or sell? What is SNAP Finny Score?

Our quantitative analysis shows 2 reasons to buy and 6 reasons to sell SNAP, resulting in Finny Score of 25.

4. What are the reasons to buy SNAP? Why should I buy SNAP stock?

Here are the reasons to buy SNAP stock:

  • Snapchat has added a number of features such as 3-D Friendmoji Deluxe World Lens, Bitmoji Deluxe, Context Cards, Stories in Search, 3D World Lens, Custom Stories, Snap Maps and Geofilters to make its platform more attractive to users as well as advertisers. The company recently collaborated with artist Jeff Koons to unveil an art platform and rolled out 3D Bitmoji World Lenses. With the addition of the Context Cards feature, users are able to view information related to the places that are geotagged to the images or videos uploaded on the application.
  • Snapchat is the most preferred social networking medium among teens, per Piper Jaffray’s 34th semi-annual Taking Stock with Teens survey. Reportedly, 47% of the respondents (with average age of 16 years) said that they prefer using Snapchat compared with 12% respondents in the fall 2016 survey. Per an October report by Axios, Snap witnessed a 40% increase in increase in submission of Stories since it unveiled its location based Map feature in June 2017. This bodes well for the company as user engagement holds the key to attracting advertisers, which is the primary source of revenues for Snap.
  • Advertising is the primary source of revenues for Snap. Snap’s transition to automated or programmatic auction of Snap Ads is driving its advertising revenues. The company’s advertising products include Snap Ads and Sponsored Creative Tools like Sponsored Lenses and Sponsored Geofilters.
  • Snap is aggressively ramping up its original content efforts. The company partnered with NBC News to produce a twice-daily headline news show Stay Tuned for the Snapchat app in a bid to reach the highly sought-after millennial cohort. Moreover, the company also inked a $100 million content deal with media giant, Time Warner Inc.
  • SNAP quarterly revenue growth was 17.00%, higher than the industry and sector average revenue growth (1.28% and 0.89%, respectively). See SNAP revenue growth chart.
  • SNAP cash to debt ratio is 1.45, higher than the average industry (0.17) and sector (0.17) cash to debt ratio. See SNAP cash to debt chart.

5. What are the reasons to sell SNAP? Why should I sell SNAP stock?

Let's look at the reasons to sell SNAP stock (i.e., the bear case):

  • Competition from Facebook poses a serious threat to the company. Facebook’s strategy of mimicking Snapchat features on its platforms to boost user growth and engagement levels has paid off. The company even succeeded in making them more popular than Snapchat.
  • Lack of revenue diversification is another major concern for Snap. The company currently has only one major source of revenues i.e advertising. Continuous decline in price per ad impression has raised concern among investors.
  • Lackluster user growth remains the primary concern for investors. The company’s problem has been its sole focus on the younger demographic. The company undoubtedly is quite popular among that demography but the failure to attract the older generation (above 34 year olds) has been a major headwind.
  • In the video streaming market, the company faces stiff competition from established players like Amazon Prime, Netflix, Hulu and Time Warner’s HBO. Given the high growth opportunity in the video streaming market, the players are ramping up their efforts to boost subscriber base. The companies are undertaking a number of initiatives such as investing more in regional programming and making more kids and family oriented content in a bid to gain an edge.
  • SNAP forward P/E ratio is 224.10, which is high compared to its industry peers’ P/E ratios. See SNAP forward P/E ratio chart.
  • SNAP Price/Book ratio is 14.95, which is high compared to its industry peers’ P/B ratios. See SNAP forward Price/Book ratio chart.
  • SNAP Price/Sales ratio is 17.12, which is high compared to its industry peers’ P/S ratios. See SNAP forward Price/Sales ratio chart.
  • SNAP short share of float is 7.02%. The stock is much more frequently shorted than the average industry, sector or S&P 500 stock. See SNAP short share of float chart.
  • SNAP short interest (days to cover the shorts) ratio is 2.63. The stock garners more short interest than the average industry, sector or S&P 500 stock. See SNAP short interest ratio chart.
  • SNAP Enterprise Value/Revenue multiple is 16.79, which is high compared to its industry peers’ Enterprise Value/Revenue multiples. See SNAP Enterprise Value/Revenue chart.

Key Stats

6. What are SNAP key stats : revenue, market cap, revenue growth, profit margin, P/E ratio, P/B ratio industry, sector, and number of employees?

Let's look at the key statistics for SNAP:

Metrics SNAP
Price $38.97
Average Price Target / Upside $26.46 / -32.10%
Average Analyst Rating Hold
Forward Dividend Yield 0.00%
Industry Internet Content & Information
Sector Technology
Number of Employees 2,884
Market Cap $40.14B
Forward P/E Ratio 273.20
Price/Book Ratio 20.87
Revenue (TTM) $1.92B
YoY Quarterly Revenue Growth 17.00%
Profit Margin -57.18%

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