Snap: Planning For A Hurricane That Probably Won't Arrive

Oct. 20, 2022 6:59 PM ETSnap Inc. (SNAP)META, PINS, TWTR67 Comments

Summary

  • Snap reported a solid Q3, but the company guided to a potentially weak Q4 on some huge negative assumptions.
  • The social media company now trades at only 3x sales with the market not accurately viewing the recent revenue slowdown in light of the massive growth the last 2 years.
  • Snap reported strong 19% DAU growth providing a better signal on normalized growth.
  • The stock is too cheap here with the panic sell off.
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Snapchat"s Snap Inc. makes IPO debut on the New York Stock Exchange. Investors flocked to initial public offering, pushing valuation of nearly $24 billion.

NYCstock

Snap (NYSE:SNAP) just reported a solid quarter and guided to very conservative Q4 numbers, causing the market to run in fear. The social media company is oddly preparing for a hurricane by announcing another $500 million share buyback. My

DAU slide

Source: Snap Q3'22 presentation

Chart
Data by YCharts

after hours chart

Source: Seeking Alpha

Chart
Data by YCharts

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Stone Fox Capital Advisors, LLC is a registered investment advisor founded in 2010. Mark Holder graduated from the University of Tulsa with a double major in accounting & finance. Mark has his Series 65 and is also a CPA.


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Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Additional disclosure: The information contained herein is for informational purposes only. Nothing in this article should be taken as a solicitation to purchase or sell securities. Before buying or selling any stock, you should do your own research and reach your own conclusion or consult a financial advisor. Investing includes risks, including loss of principal.

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