Snap Inc's stock fell 34.3% in 2024, but a focus on AI and AR could lead to recovery in 2025.

From Nasdaq: 2024-12-27 10:17:00

Snap Inc. experienced a 34.3% stock decline in 2024 but is poised for a potential turnaround in 2025 with a focus on AI and AR. User growth reached 443 million daily active users, with a 9% increase year-over-year. Revenue diversification and strong financial recovery indicate promising growth opportunities in the future.

Snap’s financial performance improved in the third quarter, with revenues up 15% year-over-year to $1.37 billion. The introduction of Snapchat+ subscription service and the doubling of active advertisers highlight revenue diversification. Snap projects fourth-quarter revenues to grow by 11-15%, with strong momentum expected in its advertising business.

Snap’s leadership in augmented reality with over 375,000 AR creators and the launch of Snap OS in Spectacles position the company for future growth in AR computing. Operational efficiency improved with adjusted EBITDA up 229% year-over-year to $132 million. The company’s strong balance sheet of $3.2 billion provides a foundation for continued innovation and growth.

Despite challenges in the advertising landscape, Snap’s strategic focus on AI and AR, along with improving financial metrics and strong user engagement, make it an attractive investment opportunity for 2025. The platform’s premium valuation reflects high growth expectations, but also implies elevated risk. With a Zacks Rank #2 (Buy), Snap presents a compelling opportunity for investors looking ahead to 2025.

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Read more at Nasdaq: SNAP Falls 34.3% in 2024: Will Its AI Pivot Pull the Stock Up in 2025?