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SNAP Stock Slips on User Decline Prediction

Karl Utermohlen

Snap (NYSE:SNAP) stock is down close to 5% today as an analyst predicts Snapchat will loser users in the U.S. for the first time this year.

SNAP Stock

Industry analyst EMarketer predicts the photo-sharing app will have 77.5 million monthly U.S. users in 2019, marking a 2.8% slide from a year earlier. This data suggests that the company’s attempts to expand its audience with games and other new features will not be able to bolster its growth in the short term.

Snap’s decline can be attributed at least in part to fans being dissatisfied with the redesign of the app, leading EMarketer to lower its projections on the Snapchat user base, even from the amount it predicted six months ago. The firm adds that it sees the app’s user growth to level off in 2020.

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The redesign took a toll on the brand last year, leading to some changes to its executive staff, as well as causing SNAP stock to decline 70% by late December when compared to its 2017 IPO price. The move also concerned investors, who grew more skeptical of the company’s ability to improve its financial situation in a competitive social media market.

The tech company said last month that its daily active users in the fourth quarter of 2018 was unchanged when compared to a previous quarter. Snap had experienced a quarter-to-quarter decline of 1 million daily active users in the third quarter.

SNAP stock is down about 4.8% on Wednesday following the news.

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