Technology

Snap's shares fizzle out as its user growth falters

Snap's shares fizzle out as its user growth falters”

For the second quarter, SNAP is expected to report a loss of $0.14 per share, excluding stock-based compensation, on revenue of $187.2 million, according to Wall Street analyst estimates. The firm had revenue of $181.70 million for the quarter, compared to the consensus estimate of $186.49 million. Snap also said that its user growth rate was slowing and that it did not have a firm global expansion plan. Equities research analysts expect that Snap will post ($0.56) earnings per share for the current fiscal year.

Shares of Snap, owner of the popular messaging app Snapchat, have been punished by investor concerns about user growth and waning confidence in the company's ability to ever turn a profit.

Last night, camera-centric social networking app maker Snap Inc (SNAP) reported second quarter earnings, and the bearish results and outlook are actually bullish for rival Facebook Inc (NASDAQ:FB). The company's revenues increased from Q2 of 2016, when it had $71.798M in revenues. They set a "neutral" rating and a $24.00 price objective on the stock. "We believe deeply in the long-term success of Snap", Mr. Spiegel said. Accern ranks coverage of publicly-traded companies on a scale of negative one to positive one, with scores nearest to one being the most favorable. But to gain additional revenue from users, he said, Snapchat would have to beef up its content and rapidly improve its product.

Its stock, which was priced at $17 for its public offering, is now trading at less than $14.

Instagram Stories, which debuted a year ago, had 250 million users as of June, up from 200 million in April.

Despite another disappointing performance, Snap cofounder and CEO Evan Spiegel put on a courageous face on Thursday. "Our dancing hot dog is likely the world's very first augmented reality superstar", said billionaire Snap CEO Evan Spiegel on a webcast with investors. An analyst asked Spiegel to specifically explain the so-called growth-hacking techniques - things like sending lots of push notifications that are created to boost app usage - he opposes.

Snap is not the only young company that has stumbled after going public while facing off with one of the tech giants. Headcount in the second quarter grew 10 percent to 2,600, down from the 27 percent growth rate in the previous quarter.

For a few months, Snap's stock stayed above its I.P.O. price.

The closely watched daily active user (DAU) count rose by 7 million sequentially and 30 million annually to 173 million, falling slightly short of a 174.6 million consensus.

The analyst said in a note to investors that he sees "strong upside potential" for Snap and its stock price over the next 12 months.



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