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Snap (SNAP) Gains But Lags Market: What You Should Know

Zacks Equity Research

Snap (SNAP) closed at $13.62 in the latest trading session, marking a +0.52% move from the prior day. The stock lagged the S&P 500's daily gain of 4.22%. At the same time, the Dow added 4.53%, and the tech-heavy Nasdaq gained 3.85%.

Heading into today, shares of the company behind Snapchat had lost 28.61% over the past month, lagging the Computer and Technology sector's loss of 6.68% and the S&P 500's loss of 7.39% in that time.

Wall Street will be looking for positivity from SNAP as it approaches its next earnings report date. In that report, analysts expect SNAP to post earnings of -$0.06 per share. This would mark year-over-year growth of 40%. Our most recent consensus estimate is calling for quarterly revenue of $467.13 million, up 45.78% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $0 per share and revenue of $2.39 billion. These totals would mark changes of +100% and +39.4%, respectively, from last year.

Any recent changes to analyst estimates for SNAP should also be noted by investors. Recent revisions tend to reflect the latest near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 20.92% lower. SNAP currently has a Zacks Rank of #3 (Hold).

Investors should also note SNAP's current valuation metrics, including its Forward P/E ratio of 12195. For comparison, its industry has an average Forward P/E of 42.45, which means SNAP is trading at a premium to the group.

The Internet - Software industry is part of the Computer and Technology sector. This group has a Zacks Industry Rank of 153, putting it in the bottom 40% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.

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