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    Snap stock dives on quarterly earnings report

    shivachetanbijjal@gmail.comBy shivachetanbijjal@gmail.comJanuary 31, 2023No Comments3 Mins Read
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    break off (SNAP ) reported fourth-quarter results late Tuesday, slightly missing revenue guidance and beating earnings estimates in a tumultuous time for the social media company. Snap shares plummeted.




    x



    The company reported adjusted earnings of 14 cents per share on revenue of $1.3 billion. Analysts expected Snap to report earnings of 11 cents per share on revenue of $1.31 billion.

    While earnings topped expectations, the company said in a letter to investors that revenue was down about 7% so far in the first quarter.

    “Our internal forecast assumes Q1 revenue will be in the range of -10% to -2% year-over-year,” Snap said.

    slump; face headwinds

    Shares of Snap plunged 14% to 9.93 in after-hours trading on the stock market today.

    In late August, Snap said it would lay off 20% of its more than 6,000 employees as part of a company-wide restructuring.

    The company owns and operates the Snapchat social media application. It warned that this year may experience a period of low income growth.

    CEO Evan Spiegel said in the earnings release: “We continue to face significant headwinds as we seek to accelerate revenue growth, but we are innovation to deepen engagement in our community.”

    Snap Stock: May Need Adjustments

    “The company executed a major restructuring program last year,” Monness Crespi Hardt analyst Brian White said in a note to clients. “However, more adjustments may be required if the environment deteriorates further.”

    Like other social media companies, Snap has been hurt by privacy changes apple (AAPL) led to a disturbing drop in revenue. Additionally, advertising accounts for nearly all of its revenue.


    “In addition to Snap’s internal issues, the competitive landscape remains intense, and we believe the darkest days of the economic downturn are ahead of us,” White said.

    Jefferies analyst James Heaney maintained his Hold rating and 10 price target on Snap stock.

    “We would wait to see evidence of an improving revenue growth trajectory before becoming more aggressive,” he said in a note to clients.

    Snap stock has an IBD Composite Rating of 20 out of 99.

    Follow Brian Deagon on Twitter @IBD_BDeagon More information on tech stocks, analysis and financial markets.

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