Snap stock plunges after disappointing Q1 earnings report
Snap Inc. (NYSE: SNAP), the parent company of social media platform Snapchat, saw its stock plummet by nearly 20% on Friday after reporting first-quarter earnings below expectations. The company’s Q1 revenue of $989 million was lower than the expected $1.063 billion (Barron’s). This marks the third consecutive quarterly miss for the company.
Investors also expressed concern over a decline in daily active users, which fell by 1 million to 280 million (The Motley Fool).
Snap attributed the lower revenue to changes it made to its ad platform, which it said “disrupted” sales demand by trying to drive more click-through conversions (MarketWatch).
This disappointing performance follows a recent decline in ad revenue growth that the company has experienced since Google shifted its ad auctions to a “cookie-less” system, as well as increased competition from platforms like TikTok (Yahoo Finance).
The company’s stock price has been on a rollercoaster ride in recent years. Snap initially went public in 2017, and after an initial surge, saw its stock plummet over the next year. In the last year, the stock had rebounded, even reaching all-time highs earlier this year, before Friday’s drop (CNBC).
Despite Friday’s drop, some analysts are urging investors to “buy the dip” and consider investing in the company, citing its potential for long-term growth (Invezz).
As of Friday’s close, Snap’s stock was down 18.7% to trade at $8.53 (Schaeffer’s Investment Research).
