Snap Inc.’s stock (NYSE: SNAP) price plunged 30.13% to $12.19 on Wednesday, wiping out nearly a third of the company’s market value in a single trading session. The massive sell-off came after the social media firm reported quarterly revenue that fell short of Wall Street’s expectations despite growing 5% year-over-year to $1.36 billion. Daily active user growth also slowed to just 10% in the latest quarter versus a year earlier.
Snap Inc Shares Plummet on Market Open
Before the plunge, Snap’s shares had closed the previous day at $17.45, giving the Snapchat parent company a market capitalization of $20.257 billion. Although revenue missed projections, adjusted earnings per share of 8 cents exceeded analysts’ consensus estimate of 6 cents. The company trimmed its net loss to $248 million from $288 million in the prior year quarter.
Over the past year, Snap added 38 million daily active users to reach 414 million in Q4. However, the 10% user growth represents a considerable slowdown from Snap’s robust expansion in previous periods. The company forecasts first-quarter 2024 revenue between $1.1 billion and $1.14 billion, equating to 11% to 15% year-over-year growth.
Analysts Optimistic on Long-Term Prospects
Despite the immediate downturn, analysts remain optimistic about Snap’s long-term prospects, setting a 12-month price target of $13.84 – a potential upside of over 13% from current levels.
Trading volume in Snap shares skyrocketed to nearly 22 million on the rocky earnings day, compared to the stock’s average volume of around 29 million shares. SNAP has traded in a wide 52-week range between $7.86 and $17.90 amid significant volatility.
Snap is scheduled to report first-quarter 2024 financial results in late April. The company’s next earnings announcement date is projected between April 25 and April 29.
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Neither the author, Tim Fries, nor this website, The Tokenist, provide financial advice. Please consult our website policy prior to making financial decisions.
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