Snap reported lower-than-expected revenue for the quarter with only $1.36 billion versus the $1.38 billion expected by analysts. The company’s adjusted earnings per share (EPS) was 8 cents, slightly higher than the 6 cents expected. Analysts expressed concerns over Snap’s slower-than-expected ad turnaround and weak engagement, highlighting the competition from Meta and Amazon as another challenge to Snap’s ad revenue growth.
Despite the disappointing earnings, some analysts remained optimistic and kept an overweight rating and a $15 price target on the stock. They believe that the weaker performance in the fourth quarter could be just a temporary setback as the company’s first-quarter growth showed acceleration, signaling a potential recovery. JPMorgan analysts, on the other hand, reiterated their underweight rating on Snap shares and stressed the need for stronger growth in engagement and the ad platform to counteract the “choppy recovery” reflected in the company’s earnings report and outlook.
In light of these varying perspectives, it’s clear that there are mixed opinions about Snap’s performance and potential for recovery. While some analysts are keeping a positive outlook, others are emphasizing the need for stronger growth and improved execution from the company. The competition from tech giants like Meta and Amazon also adds another layer of challenge for Snap, as it tries to regain momentum. The coming quarters will be crucial for Snap to show whether its ad improvements and engagement can pick up the pace and make a lasting impact on its growth trajectory.
