Snap (SNAP) is set to report earnings today and, after a difficult year, it’ll be the market’s first chance this cycle to take the temperature on a social media company.
Here’s what analysts are expecting to see from Snap, as compiled by Bloomberg.
Q4 Revenue: $1.31 billion estimated
Adjusted Earnings Per Share (EPS): 11 cents estimated
Daily Active Users (DAUs): 374.7 million estimated
Q1 Revenue Guidance: $1.08 billion estimated
Even in a rough year for Big Tech as a whole, Snap’s 2022 stood out as uniquely tough. The company’s shares tumbled around 80% throughout 2022, as it was rattled by slowed digital advertising, high inflation, and fast-growing competition from TikTok.
Snap, as of Q3 2022, had 363 million DAUs, up 19% year-over-year at the time.
In August, Snap laid off 20% of its workforce, a move that affected 1,300 employees. The cuts were high-profile and included the axing its drone camera Pixy and Snap Originals, the exclusive short shows the company made with celebrities and influencers. Snap also shuffled its executive team around at the time.
Where Snap really stands
In the next day-and-a-half, investors will learn a lot about where the social media business currently stands, with Meta (META) reporting tomorrow. The Facebook parent also had a rough 2022, in which the company’s stock declined approximately 63% over the course of the year.
However, it’s worth noting that the stakes are especially high for Snap. On the heels of its terrible year, the company’s seen a number of downgrades recently, including from Citizens-owned JMP Securities this month, from Outperform to Hold. JMP analyst Andrew Boone said the move was a long time coming.
“While we acknowledge we are late with this downgrade, it reflects our preference for Meta (valuation) and Google (search has higher revenue visibility) over Snap while both have more mature short-form video products, which we expect to attract more user time over the next few years,” Boone wrote in a note to clients.
In December, Jefferies downgraded Snap from Buy to Hold, citing worries about how the company can stand up to the competition.
But don’t expect Snap to try to offer up guidance too far into the future, Wall Street’s not expecting to see the company give a full-year outlook due to “substantial uncertainty in the ad market,” Evercore analyst Mark Mahaney wrote recently.
“Snap’s higher exposure to industries like media and retail, which have pared back ad spending amid slowing macroeconomic growth, may continue to hurt its ad pricing versus social media rivals,” he wrote.
Allie Garfinkle is a Senior Tech Reporter at Yahoo Finance. Follow her on Twitter at @agarfinks and on LinkedIn.
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