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.