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Snap Inc Class A SNAP

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Morningstar’s Analysis

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Snap Reports Mixed Q3, Provides Disappointing Guidance; FVE to $70 From $74

Ali Mogharabi Senior Equity Analyst

Analyst Note

| Ali Mogharabi |

Snap posted mixed third-quarter results as it slightly missed on the top line but beat the bottom-line FactSet consensus estimates. While user growth came in better than expected, user monetization was disappointing.  We believe advertisers displayed hesitancy in purchasing ads due to uncertainty surrounding ad performance measurement brought on by Apple’s changes as well as some experiencing supply and labor shortages. We think Snap, its peers, ad agencies, and ad-techs will address the Apple issue. While timing of solutions regarding supply chain issues remains uncertain, based on Morningstar’s economic projections we are assuming that the macro environment will return to normalcy for Snap and advertisers.

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Company Profile

Business Description

Snap, which refers to itself as a camera company, has one of the most popular social networking apps, Snapchat, in developed regions such as North America and Europe. The firm has approximately 158 million daily active users. Snap generates nearly all of its revenue from advertising with 88% coming from the U.S. The firm is headquartered in Venice, California.

2772 Donald Douglas Loop North
Santa Monica, CA, 90405
T +1 310 399-3339
Sector Communication Services
Industry Internet Content & Information
Most Recent Earnings Sep 30, 2021
Fiscal Year End Dec 31, 2021
Stock Type Speculative Growth
Employees 3,863