After several months of dismal performance, Snap Inc.'s latest report confirmed forecast-beating fourth quarter earnings -- sending the beleaguered stock soaring back with gains of more than 20% in Tuesday’s after-hours trading.
The adjusted earnings loss for the fourth quarter stood at 4 cents per share, beating estimates by 4 cents. Sales came-in at $389.82 million, beating estimates by $14.6 million. Revenue increased 36% to a record $390 million, while operating loss improved $166 million to ($195) million. Adjusted EBITDA loss improved $109 million to ($50) million.
The CEO attributes this success to the long-term business strategy of developing its innovation-based businesses, sustainable product development, scaling advertising platform and hiring an expert leadership team.
With its daily average user count hovering around 186 million, the company also managed to boost its revenue per user to $2.09 from $1.53 in the year-ago period.
The year for the company ended on a positive note as user engagement stabilized after rolling out the latest variety of Android application to a small percentage of the community. Also, the company focused on maintaining a relatively flat cost structure over the last couple of quarters, which helped the company grow its full year revenue by 43% on a y-o-y basis.
SNAP saw its Momentum Indicator move above the 0 level on May 16, 2023. This is an indication that the stock could be shifting in to a new upward move. Traders may want to consider buying the stock or buying call options. Tickeron's A.I.dvisor looked at 84 similar instances where the indicator turned positive. In of the 84 cases, the stock moved higher in the following days. The odds of a move higher are at .
The Moving Average Convergence Divergence (MACD) for SNAP just turned positive on May 15, 2023. Looking at past instances where SNAP's MACD turned positive, the stock continued to rise in of 46 cases over the following month. The odds of a continued upward trend are .
SNAP moved above its 50-day moving average on May 26, 2023 date and that indicates a change from a downward trend to an upward trend.
Following a 3-day Advance, the price is estimated to grow further. Considering data from situations where SNAP advanced for three days, in of 303 cases, the price rose further within the following month. The odds of a continued upward trend are .
The RSI Oscillator demonstrated that the stock has entered the overbought zone. This may point to a price pull-back soon.
The Stochastic Oscillator demonstrated that the ticker has stayed in the overbought zone for 9 days. The longer the ticker stays in the overbought zone, the sooner a price pull-back is expected.
The 50-day moving average for SNAP moved below the 200-day moving average on May 11, 2023. This could be a long-term bearish signal for the stock as the stock shifts to an downward trend.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where SNAP declined for three days, the price rose further in of 62 cases within the following month. The odds of a continued downward trend are .
SNAP broke above its upper Bollinger Band on May 17, 2023. This could be a sign that the stock is set to drop as the stock moves back below the upper band and toward the middle band. You may want to consider selling the stock or exploring put options.
The Aroon Indicator for SNAP entered a downward trend on May 10, 2023. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options.
The Tickeron Price Growth Rating for this company is (best 1 - 100 worst), indicating steady price growth. SNAP’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron Valuation Rating of (best 1 - 100 worst) indicates that the company is significantly overvalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (6.386) is normal, around the industry mean (21.614). P/E Ratio (0.000) is within average values for comparable stocks, (40.835). Projected Growth (PEG Ratio) (5.636) is also within normal values, averaging (3.151). Dividend Yield (0.000) settles around the average of (0.023) among similar stocks. P/S Ratio (3.630) is also within normal values, averaging (10.046).
The Tickeron SMR rating for this company is (best 1 - 100 worst), indicating weak sales and an unprofitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron PE Growth Rating for this company is (best 1 - 100 worst), pointing to worse than average earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron Profit vs. Risk Rating rating for this company is (best 1 - 100 worst), indicating that the returns do not compensate for the risks. SNAP’s unstable profits reported over time resulted in significant Drawdowns within these last five years. A stable profit reduces stock drawdown and volatility. The average Profit vs. Risk Rating rating for the industry is 93, placing this stock worse than average.
The average fundamental analysis ratings, where 1 is best and 100 is worst, are as follows