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Snap Delivers Upbeat Results in Q2; Shares Gain 18% After-Hours

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Shares of the social media-style firm Snap (SNAP), known for its mobile camera communication application Snapchat, jumped almost 18% in Thursday’s extended trading session after the company delivered a blowout second quarter driven by strong revenue and growth in daily active users.

The company reported revenues of $982 million, which surpassed the Street’s estimates of $845 million and jumped 116% from the year-ago period.

Daily Active Users came in at 293 million in Q2, up 23% year-over-year.

Earnings came in at $0.10 per share, beating the consensus estimates of a loss of $0.01 per share. A loss of $0.09 per share was reported in the same quarter last year.

Snap CEO Evan Spiegel said, “We are pleased by the progress our team is making with the development of our augmented reality platform, and we are energized by the many opportunities to grow our community and business around the world.” (See SNAP stock charts on TipRanks)

For Q3, revenue is anticipated to be in the range of $1.07 – $1.09 billion versus analysts’ estimates of $1.01 billion. The guidance reflects an increase of 58% – 60% on a year-over-year basis.

Following the Q2 results announcement, Evercore ISI analyst Mark Mahaney reiterated a Buy rating and a price target of $75 (19.1% upside potential).

For Q3, Mahaney expects the company to post a loss of $0.19 per share.

The rest of the Street is cautiously optimistic about the stock with a Moderate Buy consensus rating based on 15 Buys, 4 Holds, and 1 Sell. The average SNAP price target of $78.50 implies 24.7% upside potential from current levels. Shares have gained 186.6% over the past year.

SNAP scores an 8 out of 10 from TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform market expectations.

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