Snap Shares Are Up 27% On Tuesday, Here’s Why

Snap Inc. CEO Evan Spiegel

Snap Inc (NYSE: SNAP)

Shares of Snap Inc., the parent company of camera app Snapchat, were up 27.70% to $8.99 as of 11:33 a.m. in New York on Wednesday after posting upbeat Q4 2018 revenue numbers a day earlier. But that is still below the $17 price that the stock had on its first day on Wall Street in March 2017.

The social media company is no longer posting declines in daily active users, and it reported more revenue in the latest quarter than analysts were anticipating. However, it is still unprofitable and reported a loss of about $192 million

SNAP Earnings & Outlook

Snap said fourth-quarter loss was $191.7 million, or $0.14 per share versus a loss of $350 million, or $0.28 per share, in the same period last year. Excluding one-time items, the company had a loss of $0.04 per share. Analysts were expecting a loss of $0.19 per share, based on figures compiled by FactSet.

Revenue came to $389.8 million for the period, up from $285.7 million in the same three months a year ago, compared with analysts’ expectations for revenue of $377.2 million. Daily active users (DAUs) were 186 million, while average revenue per user was $2.09 in the fourth quarter.

Wall Street had called for 184.3 million daily active users and average revenue per user of $2.05 for the quarter. In the same period last year, the company had 187 million daily active users and average revenue per user of $1.53.

Looking ahead, Snap expects first-quarter revenue to in the range of $285 million to $310 million, while analysts forecast revenue of $299.5 million. Adjusted loss before interest, tax, depreciation, and amortization is expected to be between $165 million to $140 million, while analysts model a loss of $170.6 million loss.

Snap CEO Comments

“In 2018, we focused on building a foundation to scale the business over the long-term by driving sustainable product innovation, scaling our advertising platform, and hiring the leadership team that will help us achieve our future goals,” said Evan Spiegel, CEO.

“We ended the year with user engagement stabilizing and have started rolling out the new version of our Android application to a small percentage of our community. We are substantially closer to achieving profitability, as we have maintained a relatively flat cost structure across the past five quarters while growing full-year revenue 43 percent year-over-year.”

Snap Inc. Profile

Snap, Inc. engages in the operation of its camera platform. It is also involved in the provision of advertising services by helping its partners in generating return on investments. Its products include Snapchat, publisher tools, and spectacles. The company was founded by Frank Reginald Brown IV, Evan Thomas Spiegel, and Robert C. Murphy in July 2011 and is headquartered in Venice, CA. – CNN Money