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Snap Q1 Earnings Preview: What To Expect

Wayne Duggan

Snap, Inc. (NYSE: SNAP) is looking to continue its red-hot 2019 when the company reports first-quarter earnings. Here’s a look at what Wall Street is expecting from Snap after Tuesday's closing bell.

The Numbers

Analysts are expecting Snap to report a first-quarter EPS loss of 12 cents. Analysts are also calling for revenue of $306.48 million, up 32.9 percent from a year ago. Investors will also be watching user numbers closely. The consensus analyst estimate for daily active users is 187 million, up from 186 million in the fourth quarter.

A recent report by eMarketer suggests Snap may report its first ever decline in U.S. monthly users this quarter. Snap disputes the methodology eMarketer used in its study.

“The report does not factor in key recent developments at Snap, such as our revamped Android app, or reference our statement in February that we do not anticipate a sequential decline in our daily active user total in Q1 2019,” a Snap spokesperson said, according to Barron’s.

Looking ahead to the second quarter, Wall Street analysts are expecting Snap to guide for EPS loss of 9 cents on $348 billion in revenue.

Analyst Take

Several analysts have weighed in on Snap ahead of its earnings report.

Nomura Instinet analyst Mark Kelley is expecting $301 million in revenue and 186 million DAUs, both below consensus expectations.

“We expect the company to focus on the Android redesign, which in our view is one of the most important issues the company faces, and we anticipate there will be plenty of commentary about the new features announced at the Snap Partner Summit such as Snap Games and Snap Audience Network,” Kelley wrote in a note. He said any commentary on the call about the long-term trajectory of Snap’s user growth will also be key for the stock.

Nomura Instinet has a Neutral rating and $9 price target for Snap.

View more earnings on SNAP

Guggenheim analyst Michael Morris is more bullish on Snap’s quarter, estimating a $307 million in revenue and 188 million DAUs, both slightly above consensus expectations.

“[D]espite the strong YTD share performance, given the relatively early stage of both new product rollouts and the Android rewrite, we believe expectations for reported performance improvements remain low,” Morris wrote. He said the market will zero in on user growth, advertising revenue and expenses.

Guggenheim has a Neutral rating and no target for Snap.

Volatility Ahead?

Last quarter, Snap's stock initially jumped more than 20 percent following an across-the-board earnings beat. Snap has a history of volatile earnings reactions.

According to Optionslam.com, Snap’s seven-day implied movement based on the weekly options market is 14.1 percent.

Snap shares are already up 113.4 percent year-to-date ahead of Tuesday’s report. The stock traded higher by more than 3 percent Tuesday morning to $11.95 per share.

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Latest Ratings for SNAP

Date Firm Action From To
Apr 2019 Downgrades Mixed Negative
Apr 2019 Downgrades Outperform Neutral
Apr 2019 Maintains Underweight Underweight

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