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Snap (SNAP) Gains As Market Dips: What You Should Know

Zacks Equity Research
·2-min read

Snap (SNAP) closed the most recent trading day at $61.37, moving +0.61% from the previous trading session. The stock outpaced the S&P 500's daily loss of 0.08%.

Prior to today's trading, shares of the company behind Snapchat had gained 11.52% over the past month. This has outpaced the Computer and Technology sector's gain of 2.81% and the S&P 500's gain of 1.68% in that time.

SNAP will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of -$0.02, up 77.78% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $835.35 million, up 83.93% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $0.22 per share and revenue of $3.9 billion, which would represent changes of +466.67% and +55.52%, respectively, from the prior year.

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It is also important to note the recent changes to analyst estimates for SNAP. These recent revisions tend to reflect the evolving nature of short-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. SNAP is holding a Zacks Rank of #3 (Hold) right now.

Investors should also note SNAP's current valuation metrics, including its Forward P/E ratio of 277.27. For comparison, its industry has an average Forward P/E of 63.69, which means SNAP is trading at a premium to the group.

The Internet - Software industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 192, putting it in the bottom 25% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


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Zacks Investment Research