Snap Stock Price Dropped 7% In A Day, What To Expect?
From Nasdaq: 2024-08-07 22:43:03
Snap’s stock (NYSE: SNAP) dropped 6.9% on 5th August, while Meta Platforms (NASDAQ: META) fell 3%. Factors include weak Q2 results, Q3 guidance, and increased unemployment rates affecting investor sentiment. Snap is currently trading 34% below its fair value estimate of over $13 by Trefis.
Snap experienced an 80% decline in stock price from $50 in early 2021 to around $9 now. Financial data showed inconsistent performance with -6%, -81%, and 89% returns in 2021, 2022, and 2023 respectively. Despite challenges, Snap’s revenues grew 16% y-o-y to $1.24 billion in Q2, with a reduced net loss.
In the first half of FY2024, Snap’s revenues increased 18% y-o-y to $2.43 billion, with a reduction in net loss from $706 million to $553.7 million. Q3 revenue projections are between $1,335 – $1,375 million, lower than estimates. Trefis forecasts revenues to remain at around $5.35 billion in FY2024, with a projected improvement in revenue per share to $3.31.
Returns for Snap were -35% in Aug 2024, -49% YTD, and -40% total since 2017. In comparison, the S&P 500 recorded -3% MTD, 12% YTD, and 139% total returns since 2017. Trefis’ Reinforced Value Portfolio showed -6% MTD, 1% YTD, and 650% total returns since 2017.
Investors face uncertainty as Snap navigates challenges in a volatile market environment. It remains to be seen if Snap can recover and outperform the S&P 500 in the coming months. Watch for updates on Snap’s revenue performance and stock valuation to gauge future investment opportunities.
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