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Could 2019 Be The Year for Snapchat?


SNAP, Snap Snapchat Q4 Earnings 2019

A look at SNAP after their Q4 and annual earnings report.

Released on Tuesday, February 5, 2019, 7:40 PM ET
by Email Russ UrbanContact SpeculatingStocks

Pittsburgh, PA (SpeculatingStocks) - Snap Inc. (NYSE:SNAP) has been a company that's been roiled with issues since its initial public offering at $17 a share in March of 2017. SNAP has looked like a bad investment until today where the company shocked Wall Street and finally showed its ability to turn around nearly two years after its IPO.

SNAP eased worries that Snapchat would continue to lose users to Facebook's (NASDAQ:FB) Instagram by saying that the number of people using Snapchat would remain at current levels this quarter. Snapchat currently has 186 million daily active users, above analysts' expectations of 184.91 million. The most appealing data from Snapchat's earnings report was that average revenue per user was $2.09 during Q4 vs. $1.53 for the same quarter last year. This is a huge 36% increase. Net loss came in at $191.67 million, compared with $349.98 million a year ago. Revenue guidance came in at about in-line.

SNAP has a goal of reaching profitability by the end of 2019. It is a real possibility with a flat cost structure at Snap, Inc., meaning that as revenue climbs, it will close the net loss gap dollar for dollar.

An argument can be made that Snapchat is now undervalued with a market cap of approximately $11 billion (with After Hours gains added in.) Twitter (NYSE:TWTR) trades at a market cap of approximately $26 billion. It would be reasonable to believe that SNAP may be challenging Twitter for #2 in the social media industry by the start of 2020, which would have made 2019 a banner year for SNAP shares.

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⇒ About the Author of this News Article:

Russ Urban has been following the stock market for over 18 years and holds a Bachelor's Degree in Finance. From a young age, he watched CNBC with a keen eye and became obsessed with the market and technology. Russ Urban has written hundreds of stock articles and stock picks through the years since he founded, Inc. in 2006 and holds strong faith in the power of the markets and capitalism.

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