SNAP - Snap: Be Greedy When Others Are Fearful (Rating Upgrade)

2024-02-07 06:20:54 ET

Summary

• Snap's shares dropped over 32% after its Q4 earnings report on Thursday, despite revenue growth and user growth.
• The company's paid subscription service, Snapchat+, is seeing solid acquisition momentum and now has 7 million users.
• Snap's valuation is high, given the lack of profitability, but there is potential for revaluation if the social media platform continues to monetize its user base effectively.
• I see a strong buy opportunity after the crash as key metrics such as ARPU, revenue growth, DAUs and paid subscriber growth point in the right direction.

Shares of SNAP ( SNAP ) skidded more than 32% after the social media company submitted its earnings sheet for the fourth quarter on Wednesday . The earnings report was not really that bad as the company saw revenue growth year over year, expanded its user base and saw continual expansion of its paid subscription service Snapchat+. However, Snap continued to report a big net loss for FY 2023, indicating that it will take even more time for the social media company to move towards profitability. Snapchat+ now has 7 million users and the company could double its user base within the next year, in my opinion. I am upgrading Snap to strong buy following the crash and I believe this is a unique opportunity to be greedy!...

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