SNAP - Snap: Recovering From A Temporary Setback But Worth The Wait

2024-05-20 22:34:24 ET

Summary

• Snap's business has been significantly impacted by the macro environment and privacy initiatives in recent years and the company has been unfairly maligned as a result.
• Snap's growth is now rebounding, though, which the company has attributed to a stronger demand environment and improving ad performance.
• Despite this, Snap has genuine issues which are yet to be resolved. Of particular concern are rising infrastructure costs and enormous R&D investments with unclear payoffs.
• The stock could move higher if the company's fundamentals improve, but it is difficult to get excited about Snap's long-term prospects unless its efficiency improves.

Snap's ( SNAP ) financial performance continues to rebound after a difficult 2-year period which has been driven by a combination of macro headwinds and privacy initiatives impacting digital advertising. While Snap's near-term future is highly dependent on macro conditions remaining stable, the company should continue to generate solid growth with improving margins over a longer time frame....

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