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Snap Inc (SNAP) is rated 16 by InvestorsObserver, putting it at the bottom of the Communication Services sector. In addition to outperforming 9 percent of companies in the Communication Services sector, SNAP’s 16 overall rating outperforms 16 of all stocks.
SNAP Stock Overview
SNAP Stock Forecast 2022
As of 10:52 a.m. on Tuesday, Nov. 22, Snap Inc (SNAP) stock is down 0%, while the S&P 500 is up 0.79%. SNAP is steady from its previous close of $9.96 on volume of 6,503,863 shares. The S&P 500 has dropped -14.99% in the last year, while SNAP has dropped -79.78%. SNAP has lost -$0.69 per share in the last year.
On May 23, 2022, the stock dropped 43% to $12.79 a share when the firm reduced its revenue and EBITDA targets for 2022. Following poor second-quarter earnings, the company’s stock dropped 39% on July 23.
The SNAP stock price closed at $9.93 on November 1, 2022, or around 41.6% less than its IPO price of $17. According to Companiesmarketcap.com, the loss has reduced the company’s market capitalization to $16.53 billion as of November 1st, down from $131.48 billion in September last year, when the stock closed at an all-time high.
As of November 2nd, 2022, the stock had a consensus rating of “hold” from 28 Wall Street analysts polled by TipRanks, with 19 analysts recommending “hold,” two recommending “sell,” and seven recommending “buy.”
Analysts predicted that SNAP stock will average $10.62 in the next 12 months, a 5.88% increase from the previous price. These analysts set a high price objective of $19 and a low-price target of $7.
Trading Economics, an economic data source, was less enthusiastic, projecting a SNAP stock price of $9.76 by the end of the fourth quarter and $8.85 in a year.
The stock might conclude the year at $14.318, according to Gov Capital’s SNAP stock forecast for 2022.
SNAP Stock Forecast 2023
When analyzing a stock, users also consider the market-implied outlook, which is a probabilistic price return projection that reflects the consensus view among option buyers and sellers.
The market-suggested prognosis was negative through early 2023 as of April 14th, indicating that the shares were anticipated to fall further. Additionally, the market-implied volatility forecast was 75% (annualized) through the middle of 2022 and 63% to the beginning of 2023.
According to our prediction method, the stock’s future price will be 53.249362675262$ (415.982%) after a year. This means that if you spend $100 today, your current investment may be worth $515.982 on November 24th, 2023.
Furthermore, the median 12-month price target for SNAP Inc from the 35 analysts providing 12-month forecasts is 10.00, with a high estimate of 23.00 and a low estimate of 3.00. The median forecast is -3.15% lower than the previous price of 10.33.
SNAP Stock Forecast 2024
Longer-term SNAP stock price forecasts have it rising to $105.468 by the end of 2024.
To date, analysts have set a target price of $11.69 for SNAP shares. The resistance level today is the 200 Day Moving Average ($19.65).
In January and February 2024, you can expect negative monthly dynamics of the instrument with an 8-10% volatility. However, from March 2024 till June, there is a positive association with the monthly dynamics, an estimated average price of 7.02, and a volatility of 5-7%. Thereafter, July and August return with a negative association, a SNAP price of 6.02, and a 13% volatility
According to MarketWatch, Loop Capital’s markets analyst Rob Sanderson, assuming SNAP’s monetization follows the same path that Facebook Inc (NASDAQ: FB) did in its early days as a public business, revenue may climb to $19 billion by 2025 from $2.5 billion in 2020.
Concurring Sanderson, if SNAP increases its North American user population to 107 million from 90 million and doubles its foreign user base to 306 million from 159 million, the messaging business could make $25 billion in advertising income.
Why Is It Important?
While Alphabet Inc (NASDAQ: GOOGL) (NASDAQ: GOOG) subsidiary Google and SNAP have similar gross margin profiles, the latter had to bear traffic-acquisition costs, while SNAP is “entirely organic and more similar to Facebook,” according to the analyst.
SNAP’s costs are largely infrastructure-related payments to its cloud-service suppliers, which led Sanderson to believe that it can gain leverage as it grows.
According to Sanderson, “at a 25x future [price-to-earnings multiple], this model would suggest that a +$200 billion market value may be possible for SNAP in the 2025 or 2026 timeframe.”
Long-Term Forecast 2030
SNAP estimated at an investor presentation earlier this year that its revenue will expand by 50% per year over the next few years.
The firm anticipates that growth will be driven by the development of its self-service ads, an increasing mix of higher-value video ads, new augmented reality (AR) lenses, in-app games, and its transition into a camera-based “social shopping” platform.
SNAP Map, the company’s searchable map for user-submitted videos, was recently enhanced with business recommendations, which might open the way for more location-based services and make it a viable rival to Alphabet’s Google Maps.
All of these developments point to Snapchat being a diverse all-in-one “super app” that will serve a considerably wider audience than its present 293 million daily active users (DAUs) by 2030.
If SNAP increased its revenue by 50% per year, it would increase from $2.5 billion in 2020 to $145 billion in 2030. Furthermore, if the stock continues to trade at around 30 times sales, SNAP might be valued at $4.35 trillion by then.
However, that is a rosy best-case scenario for SNAP because any firm would struggle to maintain an average revenue growth rate of 50% with a price-to-sales ratio of 30 for an entire decade.
SNAP Inc Price Analysis
Based on 27 Wall Street analysts’ 12-month price forecasts for SNAP, these are the rates: the average price target is $10.28, with a top of $18.00 and a low of $7.00. The average price prediction reflects a -0.48% increase over the previous price of $10.33. At the time of writing this article, the SNAP Inc price is at $10.32.
Shares of this firm behind Snapchat have returned -1.1% over the last month, compared to the -8.2% change in the Zacks S&P 500 composite. During this time, the Zacks Internet – Software industry, which SNAP is a part of, has dropped 10.1%. The crucial question today is: What is the stock’s potential future direction?
While news or speculations of a significant change in a company’s business prospects usually cause its stock to ‘trend’ and cause an instant price change, there are always some underlying facts that eventually dominate buy-and-hold decision-making.
SNAP is predicted to lose $0.01 per share in the current quarter, representing a -105.9% decrease from the previous quarter. Over the previous 30 days, the Consensus Estimate has changed by +5.8%.
The current fiscal year’s consensus profits projection of $0.02 is a -96% year-over-year decline. Over the last 30 days, this estimate has changed by +5.9%.
Furthermore, the consensus earnings estimate of $0.31 for the next fiscal year represents a change of +1,462.5% from what SNAP anticipated to report a year ago. The estimate has changed by +72.2% in the last month.
While earnings growth is likely the most accurate sign of a firm’s financial health, nothing happens if a company is unable to increase its revenues. After all, it’s practically impossible for a corporation to improve its earnings without expanding its revenues over time. As a result, it’s critical to understand a company’s future revenue growth.
In the case of SNAP, the average sales estimate of $1.12 billion for the current quarter is a +5% increase year over year. Estimated changes of +13.6% and +16% for the current and next fiscal years are $4.68 billion and $5.43 billion, respectively.
SNAP stock is currently not a buy due to the stock market’s decline. Growth and technology stocks have taken a beating recently, making stock buying risky at the moment.
Markets have fallen as investors prepare for higher interest rates and mixed corporate earnings.
SNAP Prediction Conclusion
Essentially, SNAP appears to be expensive according to valuation criteria. Its Value Score of D shows that it is a poor choice for value investors. SNAP’s financial health and development prospects show that the company has the potential to underperform in the market right now.
However, in the future, it is expected to reach $2.5 billion in 2020 and $145 billion in 2030. This means that they would have to maintain an average revenue growth rate of 50% with a price-to-sales ratio of 30 for an entire decade.
Is SNAP Stock Still Worth Buying?
SNAP’s core company appears to be in good shape, but revenue fell short of analysts’ expectations, and forecasts for the fourth quarter also fell short.
Furthermore, SNAP management expects sales to increase 28%-32% year over year in the fourth quarter, compared to analyst projections of 49% growth. This suggests that sales will rise 59%-61% for the full year, significantly below the 68% growth predicted.
Prior to the post-earnings drop, SNAP’s stock had risen 166% in the previous year and was trading at more than 30 times this year’s sales. As a result, investors should not be surprised that the company’s stock dropped more than 20% after failing to score a grand slam.
We believe SNAP’s recent dip was due to an overly optimistic investor day forecast and the stock’s high valuation, rather than any underlying issues with Snapchat’s company. As a result, investors who can withstand the short-term volatility may consider purchasing SNAP stock, as its growth might easily resume once the short-term challenges fade.
How to Buy SNAP Stock with a Regulated Broker
Let us begin with a step-by-step guide to investing in SNAP stock through a regulated broker:
Step 1 – Open an Account with a regulated broker: The first step is to select a broker who is SEC-regulated and provides access to SNAP stock. Then, go to the broker’s website and create an account.
Step 2 – Upload ID: Regulated brokers follow KYC requirements and demand users to verify their identification by uploading proof of ID and home address.
Step 3 – Deposit funds: The final step is for investors to fund their brokerage accounts. Most brokers accept bank wire and ACH payments. Credit/debit cards and e-wallets such as PayPal are also accepted by a lesser number of providers.
Step 4: Research and purchase SNAP stock: Before investing in a stock, investors should always undertake extensive and independent research. When you’re ready, put the SNAP stock ticker into the brokerage platform’s search box and enter the amount you want to invest in the company.
How Much Is the SNAP Stock Worth?
Is it better to purchase or sell Snapchat stock? We’ve included a quick review of the SNAP stock history to help address this query.
In March 2017, the company went public and began trading on the NYSE. A single SNAP share cost $17 at the time of its IPO. By the conclusion of the trading day, SNAP stock had risen by more than 40% to around $24 per share.
The price of this stock did not move significantly over the next three years, till 2020.
Toward the end of 2020, the value of SNAP began to grow, benefiting from the general surge in stock prices throughout the market. Furthermore, the stock’s value increased because of its excellent earnings reports in Q1 and Q2 2021.
Notably, the price of this stock soared by more than 600% between March and September 2021.
However, by the beginning of October 2021, the SNAP stock price had begun to fall.
At the time of writing, the stock price of SNAP is about $10. This is roughly 88% less than the all-time high reached in September 2021.
Will SNAP Stock Go Up or Down?
SNAP’s anticipated stock price could rise in the near and medium term, according to analyst forecasts aggregated by MarketBeat and TipRanks (as of November 2nd). Remember that financial markets are still volatile, and analysts’ forecasts can be off. Therefore, you should always conduct your own research.
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