Why Snap (SNAP) Dipped More Than Broader Market Today

In the closing of the recent trading day, Snap (SNAP) stood at $15.16, denoting a -1.04% change from the preceding trading day. Read More...

The most recent trading session ended with Snap (SNAP) standing at $15.16, reflecting a -1.04% shift from the previouse trading day’s closing. This move lagged the S&P 500’s daily loss of 0.74%. Elsewhere, the Dow lost 1.06%, while the tech-heavy Nasdaq lost 0.58%.

The company behind Snapchat’s stock has climbed by 1.79% in the past month, falling short of the Computer and Technology sector’s gain of 7.86% and the S&P 500’s gain of 4.27%.

The upcoming earnings release of Snap will be of great interest to investors. In that report, analysts expect Snap to post earnings of $0.02 per share. This would mark year-over-year growth of 200%. Simultaneously, our latest consensus estimate expects the revenue to be $1.25 billion, showing a 16.75% escalation compared to the year-ago quarter.

SNAP’s full-year Zacks Consensus Estimates are calling for earnings of $0.23 per share and revenue of $5.34 billion. These results would represent year-over-year changes of +155.56% and +15.97%, respectively.

Investors should also pay attention to any latest changes in analyst estimates for Snap. These recent revisions tend to reflect the evolving nature of short-term business trends. Therefore, positive revisions in estimates convey analysts’ confidence in the company’s business performance and profit potential.

Our research reveals that these estimate alterations are directly linked with the stock price performance in the near future. To exploit this, we’ve formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable 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 past month, there’s been a 4.74% rise in the Zacks Consensus EPS estimate. Snap is currently sporting a Zacks Rank of #2 (Buy).

From a valuation perspective, Snap is currently exchanging hands at a Forward P/E ratio of 65.79. This represents a premium compared to its industry’s average Forward P/E of 29.26.

The Internet – Software industry is part of the Computer and Technology sector. Currently, this industry holds a Zacks Industry Rank of 67, positioning it in the top 27% of all 250+ industries.

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.

Ensure to harness Zacks.com to stay updated with all these stock-shifting metrics, among others, in the next trading sessions.

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