Breaking News
Ad-Free Version. Upgrade your experience. Save up to 40% More details

Snap: Too Late To Buy The Stock After A 200% Jump In 12 Months?

By (Haris Anwar/ MarketsSep 23, 2021 07:44
Snap: Too Late To Buy The Stock After A 200% Jump In 12 Months?
By (Haris Anwar/   |  Sep 23, 2021 07:44
Saved. See Saved Items.
This article has already been saved in your Saved Items

The upward trajectory for photo-sharing app operator Snap (NYSE:SNAP) continues unabated. Shares of the company rose 25% during Q2 alone, and have moved higher since. Over the past 12 months the stock has rallied more than 200%.

SNAP Weekly Chart.
SNAP Weekly Chart.

This momentum has made Snap the best social media stock among the smaller players.

The past year brought a record number of daily active users on its Snapchat app where they found social connection and entertainment during the pandemic. The number of users has surged. As well, users have increased the amount of time they spend watching premium content on Snapchat. This uptick coincided with the company’s investments in content and creative tools.

The California-based Snap tactfully channelled this increased traffic to ramp up its appeal for advertisers. Sales in the second-quarter more than doubled compared with the same period a year ago, reaching $982.1 million. Snapchat, the mobile app for sending disappearing messages and watching video content, added 13 million daily users during the second quarter, a 23% jump from the same period a year ago.

By the end of June, about 293 million people globally were using Snapchat every day, up from 173 million this time four years ago. In comparison, Twitter (NYSE:TWTR) reported 206 million daily users in the second quarter.

As Snap business fires on all cylinders, there are some risks ahead that could stop the stock’s remarkable upside move. One of the biggest risks—which is not unique to Snap—is Apple’s (NASDAQ:AAPL) changes to its iPhone app policy. In a software update this year, Apple is letting iPhone users decide if they want to be tracked for advertising purposes.

Across the industry, only 25% of people are opting to give apps permission to track their behavior, according to Branch, which analyzes mobile app growth. Reduced tracking means it’s harder for social media companies like Snap to tailor and target ads, putting revenue at risk.

Analysts Remain Bullish

Another unknown in the post-pandemic environment is whether users will reduce their social media interaction when life returns to normal. Snap, like some of its bigger rivals, including Facebook (NASDAQ:FB) and Google (NASDAQ:GOOG) (NASDAQ:GOOGL), benefited from an e-commerce boom during the pandemic, forcing companies of all sizes to spend more on social media ads in order to reach customers.

Amid these risks, however, some analysts still believe that there is more upside for Snap shares. Analysts at Loop Capital in a recent note said Snap’s ad business will remain a “powerful driver for the near- and medium-term” growth.

The note added:

“We remain bullish on Snap as the company continues to show the best revenue growth momentum in the internet advertising sector and with significant monetization upside to match other networks.”

The majority of 39 analysts polled by, continue to have an “outperform” rating on the stock, with the 12-month consensus price target showing about 10% upside from its current level.

Consensus Estimates
Consensus Estimates


Snap shares closed Wednesday at $78.60.

These bullish projections indicate that analysts believe in the company’s strategy to fuel growth by deploying its augmented reality tools and expanding in international markets.

The social media company forecasts that it could generate revenue growth of 50% or more for several years, as advertisers increasingly seek to tap Snap’s tools which let users interact with products virtually. On the global front, the company is adding more local content, investing in regional marketing campaigns and offering more language support to products.

Bottom Line

Snap continues to remain our favorite play to capture social media growth in the post-pandemic environment due to its new digital tools and its focus on the right segment of the market.

Snap: Too Late To Buy The Stock After A 200% Jump In 12 Months?

Related Articles

Kseniia Medik
Facebook Reported Q3 Earnings By Kseniia Medik - Oct 26, 2021 1

Facebook (NASDAQ:FB), one of the largest tech companies in the US, has revealed its financial results for the third quarter.Results- EPS: $3.22 (forecast: $3.19)- Revenue: $29.01B...

Snap: Too Late To Buy The Stock After A 200% Jump In 12 Months?

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (1)
faizal memon
faizal memon Sep 23, 2021 16:04
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
Sign up with Email