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Snap Inc Class A - Stock Quote SNAP

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Morningstar's Snap Inc Class A Stock Analysis

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Snap Warns of Disappointing Q2; Fair Value Estimate Lowered to $49, but Shares Still Undervalued

Ali Mogharabi Senior Equity Analyst

Analyst Note

| Ali Mogharabi |

In an 8-K filing on May 23, Snap said it had lowered its second-quarter revenue and adjusted EBITDA forecast, mainly citing the Ukraine war and macro headwinds. While its peers may also feel pressure on revenue growth, we think the effect on Meta and Google’s YouTube is likely less as they remain the top platforms for direct-response advertising, which we expect will be affected less than brand advertising. Twitter’s revenue growth will likely be pressured as the platform continues to attract more broad-based brand campaigns. We do not expect spending on contextual advertising, which IAC’s properties attract, to be affected as much. In addition, during economic slowdowns advertisers prioritize purchasing ad inventory from the likes of Meta’s Facebook and Instagram, TikTok, and YouTube over others in the space, including Snap and Pinterest.

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Snap Inc Class A's 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 319 million daily active users. Snap generates nearly all its revenue from advertising with 72% coming from North America, mainly the U.S. The firm is headquartered in Venice, California.

Contact
3000 31st Street
Santa Monica, CA, 90405
T +1 310 399-3339
Sector Communication Services
Industry Internet Content & Information
Most Recent Earnings Mar 31, 2022
Fiscal Year End Dec 31, 2022
Stock Type Speculative Growth
Employees 5,661