SNAP - Snap: User Growth Is Slowing While Costs Are Skyrocketing
2024-03-26 03:21:16 ET
Summary
- Snap has experienced a slowdown in user growth as well as advertiser interest, leading to a 30% decrease in share value.
- The company faces risks of competition from newer platforms and struggles to compete with Facebook and Instagram's appeal.
- Snap's investments in machine learning have resulted in high server costs, impacting gross margins and profitability.
- I'd recommend waiting for Snap to fall below $10 before buying in.
Amid a broad rally in tech stocks this year, one major social media company has been a notable holdout: Snap Inc. ( SNAP ), the maker of the eponymous disappearing-messaging app. The Evan Spiegel-founded company has reported a slew of problems over the past several quarters, including slowing user growth, declining advertiser interest, and sharply rising infrastructure costs....
Snap: User Growth Is Slowing While Costs Are Skyrocketing