Snap Rises on Earnings Beat

The Californian social media improves profitability and cash flows Read More...

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="- By Alberto Abaterusso

” data-reactid=”11″>- By Alberto Abaterusso

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Shares of Snap Inc. (SNAP) jumped 2.5% to $12.29 in after-hours trading on Tuesday after beating consensus estimates on non-GAAP earnings for the first quarter of fiscal 2019 by 2 cents, posting a loss of 10 cents per share or a 44% rise from the prior-year quarter.” data-reactid=”12″>Shares of Snap Inc. (SNAP) jumped 2.5% to $12.29 in after-hours trading on Tuesday after beating consensus estimates on non-GAAP earnings for the first quarter of fiscal 2019 by 2 cents, posting a loss of 10 cents per share or a 44% rise from the prior-year quarter.

The GAAP loss also improved 24% to 23 cents per share.

Revenue grew 38.9% to $320.43 million, beating expectations by $14.15 million.

The Santa Monica, California-based social media company also reported improvements in the adjusted Ebitda loss by $94 million to $123 million, in the operating cash flow by $166 million to -$66 million and in the free cash flow by $190 million to -$78 million.

The progress in the first quarter figures is attributed primarily to the sequential increase in the number of daily active users by 4 million to 190 million=. However, it is still 1 million DAUs lower than a year ago when the company reported 191 million DAUs.

The company said that as of March, Snapchat reached 75% of all 13- to 34-year-old U.S. users and peaked at 90% of all 13- to 24-year-olds.

Snap’s more efficient version of the Android application is now available to everyone, and it is significantly increasing the number of users sending Snaps on lower-performing devices.

Besides the new Android application, in April the company rolled out many products that CEO Evan Spiegel believed “will drive further engagement and monetization.”

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="For the second quarter, the company forecasted revenues of $335 million to $360 million, up 28-37% year over year, versus consensus for $348.04 million, and expects an Ebitda loss of $150 million to $125 million, compared to a year-ago Ebitda loss of $169 million.” data-reactid=”26″>For the second quarter, the company forecasted revenues of $335 million to $360 million, up 28-37% year over year, versus consensus for $348.04 million, and expects an Ebitda loss of $150 million to $125 million, compared to a year-ago Ebitda loss of $169 million.

Shares of Snap Inc. closed at $11.9 on Tuesday for a market capitalization of $15.84 billion. The stock declined 18% over the 52 weeks through April 23; however, the closing price on Tuesday was above the 200-, 100- and 50-day simple moving average lines. The share price was also 147% above the 52-week low of $4.82 and 31.7% below the 52-week high of $15.67.

The 14-day Relative Strength Indicator of 56.1 suggests the stock is neither overbought nor oversold.

Wall Street issued a hold recommendation rating for shares of Snap Inc. with an average target price of $9.96 per share reflecting a nearly 17% fall from the share price at close on Tuesday.

Disclosure: I have no positions in any securities mentioned.