Snapchat’s Quarterly Earnings Results Reveal Disappointing Revenue Growth
July 27, 2022
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It is no surprise that Snap Inc.’s ($NYSE:SNAP) quarterly earnings results revealed disappointing revenue growth, given that the company had already revised its guidance for the second quarter back in May. Originally, Snap had estimated that it would see 20-25% growth in revenue compared to the previous year, with adjusted EBITDA estimated between break-even and $50 million.
However, the actual results fell short of these expectations. This disappointing news may affect Snap’s market and earnings in the long term.
However, it is worth noting that the company is still growing, even if its rate of growth has slowed down. With this in mind, Snap may be able to rebound in the future if it can continue to attract and retain users.
Market Reaction
On Tuesday, Snapchat’s stock opened at $9.8 and closed at $9.6, after the release of their quarterly earnings results. The results showed disappointing revenue growth, and the media exposure has mostly been negative.
VI Analysis
Company’s fundamentals reflect its long term potential, below analysis on SNAP are made simple by VI app. VI Star Chart shows that SNAP is strong in growth, medium in asset and weak in profitability, dividend. SNAP has an intermediate health score of 4/10 with regard to its cashflows and debt, is likely to pay off debt and fund future operations. SNAP is classified as ‘cheetah’, a type of company that achieved high revenue or earnings growth but is considered less stable due to lower profitability. At the right price, it is suitable for those who wants to invest for high capital gains. High growth companies are deemed more volatile as they attempt to grow faster.
Summary
Some investors may be concerned about Snap’s future prospects and may be hesitant to invest in the company.
However, it is important to remember that Snapchat is still a relatively young company and that it has shown strong user growth in the past. It is possible that Snap will be able to turn things around and become a successful business.
