Snap Inc Cl A
Snap Inc Cl A
IBD Stock Analysis
- Snap stock has formed a flat base with a buy point of 80.95
- Current action is part of base-on-base pattern
- It broke a short downtrend on Tuesday in positive move
Industry Group Ranking
* Not real-time data. All data shown was captured at
1:43PM EDT on
The high end of the buy zone runs to 85, after which the stock would be extended and riskier to buy. Also, the stock market is under pressure, so investors should be cautious.
Snap stock climbed 3.1% to 78.44 in afternoon trading on the stock market today.
‘Camera Company’ With Three Brands
Snap calls itself a camera company, with three brands within its lineup: Snapchat, Spectacles and Bitmoji. By downloading its Snapchat app to a smartphone, users have access to a wide range of features. The Snapchat app, which is free, initially hit the market in 2011.
Users can discover and purchase fashion items, buy tickets, play games, catch up on news and entertainment and share their content with other Snapchat users. Snap is continuously adding new features and partnerships with other companies.
With Bitmoji, users can create a digital persona in the form of a “living cartoon.” Through Bitmoji users can express who they are and what they’re feeling at the moment.
Another page on Snapchat, called Stories, holds a library of news reports, prank videos and chronicles of other strange occurrences. Snap also is developing original content.
During the second quarter, daily active users of Snapchat jumped 23%, or 55 million, to 293 million.
Snap Stock Jumps On Earnings Report
Snap stock gapped up nearly 24% after the company reported second-quarter earnings on July 22 that smashed estimates, as did the outlook for its third quarter. Revenue soared 116% from the year-ago period to $982 million, well above estimates of $845 million. Adjusted earnings of 10 cents a share crushed estimates for a 1-cent per-share loss.
Snap has posted accelerating sales growth over the last four quarters.
After a long record of quarterly losses, earnings growth is moving in the right direction. Three of the past four quarters showed triple-digit earnings growth on an absolute value basis vs. prior-year losses.
Snap’s latest innovation is in the cutting-edge field of augmented reality, which overlays digital images and other information into a person’s field of view. Applications for the technology include navigation, education, games, commerce and more. The good news for Snap is that not only is augmented reality entertaining, it’s also a revenue driver. Snap recently introduced an augmented reality feature it calls “TrueSize,” which consumers can use as a shopping experience.
High Composite Rating For Snap Stock
Wall Street analysts recently raised earnings estimates for Snap for both 2021 and 2022. And institutional investors have shown demand for Snap stock. Last quarter, the number of funds reporting a position in Snap stock jumped to 1,446, up from 925 in Q3 2020.
The IBD Stock Checkup tool shows that Snap has an IBD Composite Rating of 95 out of a best-possible 99. The rating means Snap stock currently outperforms 95% of all stocks in terms of the most important fundamental and technical stock-picking criteria. The best stocks will often rate 98 or 99 at the time they launch a big price run.
Snap stock has a Relative Strength Rating of 96. The rating shows how a stock’s price performance over the prior 52 weeks holds up against all the other stocks in IBD’s database. Look for stocks with a rating of 80 or higher.
Please follow Brian Deagon on Twitter at @IBD_BDeagon for more on tech stocks, analysis and financial markets.
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