Going forward, management guided for 2Q21 revenues to increase 12-15% QoQ, which would also be >100% above 2Q20. The average analyst price target stands at $78.34 and implies upside potential of 34% to current levels.The firm’s adjusted EBITDA (which provides a misleading picture of the firm’s true losses) improved both QoQ and YoY but remains negative. The consensus rating among analysts is a Strong Buy based on 28 Buys, 6 Holds, and 1 Sell. Rather, we look for results to substantiate the new long-term trajectory, requiring N America ARPU to maintain the accelerating y/y track (that began in 3Q) thru at least 1H21.”įurthermore, the analyst also expects “the call to set the stage for new commerce monetization potential with tangibles revealed at its Partner Summit in May.” Zgutowicz said, “Given management’s very recent and generous investor day outlook, suggesting 50%+ revenue growth over the ‘next several years’ (lifting our LT revenue CAGR 800 bps to 34%), it’s hard to see a 1Q encore. On April 20, Rosenblatt Securities analyst Mark Zgutowicz reiterated a Buy rating and a price target of $100 on the stock. Through this acquisition, Snap aims to bring more e-commerce and in-app purchases to Snapchat. The terms of the deal were not disclosed. The company launched Crazy Run, a new game on Snap’s social platform for both iOS and Android.įurthermore, in March, Snap acquired a Berlin-based firm, Fit Analytics, which helps consumers find the right size during online buying to reduce the pain of returns. As part of the collaboration, Gismart will make games for Snapchat. Last month, Snap and London-based publisher and developer, Gismart, signed a multigame cross platform partnership. Overall, management expects to increase average revenue per user (ARPU) by scaling demand and return on investment over the next several years through innovations in AR, Premium Content, Gaming, Maps, Minis, and more. Also, a continued decline in price per ad impression and increasing competition might have weighed on advertising revenues, the only source of revenues for Snap. Meanwhile, Snap’s first-quarter top-line growth might have been impacted by lower ad spending. Therefore, with the launch of a record 97 new international Discover channels in 4Q and increasing usage of AR Lenses, the company is likely to have recorded user growth in the first quarter. Over 90% of the US Gen Z population has watched Shows and publisher content in the last quarter and the total daily time spent by Snapchatters is on the rise. Notably, continued investments in the Discover platform have reaped benefits for Snap. Usage of augmented reality (AR), one of the fastest-growing digital technologies during the pandemic, is anticipated to expand four-fold by 2023. Per the report, Gen Z is likely to support $3.1 trillion of consumer spending in these markets in 2030. Furthermore, Snap offers one of the most-used camera applications globally, with over 5 billion snaps created daily.ĭuring the first quarter, Snap and Oxford Economics jointly released a report defining Gen Z’s role in driving the post-pandemic recovery and digital economy across six markets including Australia, France, Germany, the Netherlands, the UK, and the US. Notably, DAUs were 265 million in the last quarter, reflecting growth in North America, Europe, and the Rest of the World on both iOS and Android platforms. The growing popularity of Snapchat among Gen Z (13-24 years) has been driving daily active user (DAU) growth, and therefore, is likely to have provided a cushion in the to-be-reported quarter. The company is focused on creating innovative features and has organized its platforms into five main screens, including Camera, Map, Chat, Stories, and Spotlight, which are aiding user growth. The Snapchat platform has continued to be the main product for Snap. ( See Snap stock analysis on TipRanks) Factors To Look For In addition, revenue jumped 62% to $911.3 million and surpassed analysts’ expectations of $857.39 million. The result also beat the consensus estimate by $0.02. In the previous quarter, the company reported adjusted earnings of $0.09 per share, which tripled compared to the prior-year quarter. Meanwhile, the Earnings Whisper number, or the Street’s unofficial view on earnings, stands at a loss of $0.02 per share.
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