Snap Stock News and Forecast: SNAP shares face rollercoaster trading around earnings report
- Snap shares dropped 25% on Thursday.
- SNAP stock then rallied 59% afterhours.
- Snap more than doubled Wall Street EPS forecast of $0.10.
Snap Inc. (SNAP), the social media company focused on teens and young adults, produced what seems like a schizophrenic Thursday. SNAP shares cratered 24.6% in the regular session to close at $24.50 with the market expecting a grim earnings report in line with Facebook parent Meta Platforms' gigantic earnings miss on Wednesday that weighed on the sector. Then Snap surprised to the upside, and shares rallied an astounding 59.1% afterhours to bring shares back to $39. It was an eventful day to say the least.
SNAP shares are now up 48% to $36.27 in Friday's premarket at the time of writing.
Snap Stock News: first quarter in the black
The market changed its tune as soon as it realized that Snap had achieved its first positive quarter of GAAP net income. The video site made $23 million in net income in Q4 and posted 42% YoY revenue growth. Sales came in at $1.3 billion, $100 million ahead of consensus forecasts. Adjusted earnings per share (EPS) of $0.22 were more than double expectations for $0.10.
Investors could tell immediately that Facebook's problems did not apply to this sector buddy. While Facebook's daily active users dropped by 10 million from Q3, Snap gained 13 million from the previous quarter to 319 million.
For the most part, the market ignored a sequential slowdown in guidance. In the first quarter of 2022, management projected revenue between $1.03 and $1.08 billion and a gain of just 10 million daily active users.
SNAP key statistics
| Market Cap | $51.6 billion |
| Price/Earnings Forward | 47 |
| Price/Sales | 10 |
| Price/Book | 11 |
| Enterprise Value | $50.8 billion |
| Operating Margin | 20% |
| Profit Margin |
17% |
| 52-week high | $83.34 |
| 52-week low | $24.32 |
| Short Interest | 4% |
| Average Wall Street Rating and Price Target | Buy, $61.94 |
Snap Stock Forecast: next target at $48
SNAP shares have made it the whole way back to a supply zone (shown in purple), which may hold onto the high beta stock for awhile. This particular zone runs from $38.50 to $44 and stems from the highs and lows associated with the October through December 2020 period.
SNAP stock appears poised to drive above the zero point on the Moving Average Convergence Divergence (MACD) indicator, which means a proper bull run is probable once shares can make it out of the supply zone. If they do, the next target is $48. This level has acted as support going back to December 2020 and should a certain amount of resistance.
Support stands at $34.20, $24.32 and $20.60.
SNAP 1-day chart
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Author
Clay Webster
FXStreet
Clay Webster grew up in the US outside Buffalo, New York and Lancaster, Pennsylvania. He began investing after college following the 2008 financial crisis.
