Snap (SNAP) closed the latest trading day at $11.31, indicating a -0.62% change from the previous session’s end. Elsewhere, the Dow saw a downswing of 0.2%, while the tech-heavy Nasdaq appreciated by 0.12%.
Prior to today’s trading, shares of the company behind Snapchat had gained 5.76% over the past month. This has outpaced the Computer and Technology sector’s gain of 2.66% and the S&P 500’s gain of 1.27% in that time.
The investment community will be paying close attention to the earnings performance of Snap in its upcoming release. The company’s earnings per share (EPS) are projected to be $0.13, reflecting a 62.5% increase from the same quarter last year. Meanwhile, the latest consensus estimate predicts the revenue to be $1.55 billion, indicating a 13.99% increase compared to the same quarter of the previous year.
For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of $0.24 per share and a revenue of $5.36 billion, representing changes of +166.67% and +16.28%, respectively, from the prior year.
It’s also important for investors to be aware of any recent modifications to analyst estimates for Snap. Recent revisions tend to reflect the latest near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company’s business outlook.
Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.
The Zacks Rank system, spanning from #1 (Strong Buy) to #5 (Strong Sell), boasts an impressive track record of outperformance, audited externally, with #1 ranked stocks yielding an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has moved 0.31% higher. At present, Snap boasts a Zacks Rank of #2 (Buy).
Valuation is also important, so investors should note that Snap has a Forward P/E ratio of 46.77 right now. This valuation marks a premium compared to its industry’s average Forward P/E of 35.21.
The Internet – Software industry is part of the Computer and Technology sector. With its current Zacks Industry Rank of 33, this industry ranks in the top 14% of all industries, numbering over 250.
The strength of our individual industry groups is measured by the Zacks Industry Rank, which is calculated based on the average Zacks Rank of the individual stocks within these groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
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