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Snap (SNAP)
NYSE:SNAP
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Snap (SNAP) AI Stock Analysis

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SNAP

Snap

(NYSE:SNAP)

Rating:59Neutral
Price Target:
$7.50
▲(7.30% Upside)
Snap's overall stock score is primarily influenced by its financial performance, which shows growth in revenue and cash flow but struggles with profitability. The technical analysis indicates bearish momentum, while the valuation is weak due to negative earnings. The earnings call provided some positive insights into user growth and revenue, partially offsetting other concerns.
Positive Factors
Product Innovation
The company has the ability to continue driving revenue growth by further increasing its content per accelerator to multiple 100s of $ as it introduces new connectivity products in close partnership with its customers.
Revenue Growth
Scorpio P contribution surpassed 10% of revenue, indicating strong demand as it started volume production slightly ahead of expectations.
Negative Factors
Market Share
SNAP's 2Q results and outlook continue to prove SNAP is bleeding market share, with advertising revenue growth slowing down.
Revenue Expectations
Snap's 2Q revenue and EBITDA figures were below expectations, contrasting with peers that have surpassed their targets.
Revenue Performance
Snap reported lackluster 2Q:25 results, issued an uninspiring 3Q:25 outlook, and hosted a grim call.

Snap (SNAP) vs. SPDR S&P 500 ETF (SPY)

Snap Business Overview & Revenue Model

Company DescriptionSnap Inc. operates as a camera company in North America, Europe, and internationally. The company offers Snapchat, a camera application with various functionalities, such as Camera, Communication, Snap Map, Stories, and Spotlight that enable people to communicate visually through short videos and images. It also provides Spectacles, an eyewear product that connects with Snapchat and captures photos and video from a human perspective; and advertising products, including AR ads and Snap ads comprises a single image or video ads, story ads, collection ads, dynamic ads, and commercials. The company was formerly known as Snapchat, Inc. and changed its name to Snap Inc. in September 2016. Snap Inc. was founded in 2010 and is headquartered in Santa Monica, California.
How the Company Makes MoneySnap generates revenue primarily through advertising. The company offers a range of advertising products, including Snap Ads, Story Ads, and Sponsored Lenses, allowing brands to engage with users on the platform. Advertisers pay based on impressions, video views, or interactions with ads. In addition to advertising, Snap has begun to diversify its revenue streams through partnerships and collaborations, including sponsored content with media companies and collaborations with brands for augmented reality experiences. The company also monetizes its augmented reality technology through partnerships that integrate AR into brand campaigns. Snap's investment in augmented reality and its focus on user engagement are critical factors contributing to its earnings.

Snap Key Performance Indicators (KPIs)

Any
Any
Total Daily Active Users
Total Daily Active Users
Monitors the total number of users engaging with the platform daily, indicating user growth, platform engagement, and overall market penetration.
Chart InsightsSnap's Total Daily Active Users have shown consistent growth, nearly doubling since late 2019. This sustained increase highlights the platform's expanding appeal and user engagement, potentially driven by strategic enhancements and new features. The absence of earnings call commentary leaves the reasons for this growth speculative, but the trend suggests Snap is effectively capturing a larger audience, which could translate into stronger monetization opportunities and competitive positioning in the social media landscape.
Data provided by:Main Street Data

Snap Earnings Call Summary

Earnings Call Date:Jun 30, 2025
(Q2-2025)
|
% Change Since: |
Next Earnings Date:Oct 28, 2025
Earnings Call Sentiment Positive
The earnings call highlighted significant user growth and revenue increases, particularly in Snapchat+ and augmented reality engagement. However, challenges such as an ad platform issue and flat user growth in North America were notable. Despite these challenges, the positive highlights, such as revenue growth and increased engagement, suggest a strong overall performance.
Q2-2025 Updates
Positive Updates
Monthly Active Users Growth
Snapchat reached 932 million Monthly Active Users in Q2, an increase of 64 million or 7% year-over-year.
Revenue Increase
Revenue increased 9% year-over-year to reach $1.34 billion in Q2, driven by growth in small and medium customers.
Snapchat+ Subscriber Growth
Snapchat+ approached 16 million subscribers in Q2, growing 64% year-over-year to reach an annualized run rate of nearly $700 million.
Augmented Reality Engagement
Snapchatters used AR lenses more than 8 billion times each day, with over 400,000 creators from nearly every country building more than 4 million lenses.
Spotlight Engagement
Time spent on Spotlight grew 23% year-over-year in Q2, reaching 550 million monthly active users.
Free Cash Flow
Generated $24 million of free cash flow in Q2, with $392 million over the trailing 12 months.
Negative Updates
Ad Platform Issue
An issue related to the ad platform caused some campaigns to clear the auction at substantially reduced prices, impacting revenue growth.
North America User Decline
North America MAU was flat year-over-year at 159 million, with a slight decline in active days.
Net Loss
Net loss was $263 million in Q2, compared to a net loss of $249 million in the same quarter of the prior year.
Company Guidance
During Snap Inc.'s Second Quarter 2025 Earnings Conference Call, the company provided several key metrics and insights into its financial performance and strategic initiatives. The company reported a 7% year-over-year increase in Monthly Active Users (MAU), reaching 932 million, and a 9% increase in revenue, totaling $1.34 billion. Snapchat+ subscriptions approached 16 million, contributing significantly to a 64% year-over-year growth in other revenue, nearing a $700 million annualized run rate. The adjusted EBITDA for the quarter was $41 million, with a free cash flow of $24 million, and the company ended the quarter with $2.9 billion in cash and marketable securities. Snap is advancing its augmented reality (AR) platform, with Snapchatters engaging with AR lenses over 8 billion times daily and preparations underway for the 2026 public launch of its AR glasses, Specs. The company aims to drive future growth through innovations in AI and machine learning, as well as by enhancing its advertising platform for small and medium-sized customers, who were the largest contributors to ad revenue growth in Q2.

Snap Financial Statement Overview

Summary
Snap shows revenue growth and improved cash flow management, yet profitability remains a challenge with ongoing losses. The improvement in leverage and cash reserves provides stability, but the company needs to address profitability to enhance financial strength further.
Income Statement
65
Positive
Snap's revenue has shown consistent growth, with a notable increase from the previous period, improving by approximately 3.14% in the TTM (Trailing-Twelve-Months). Despite positive gross profit margins around 54.07%, the company struggles with negative EBIT and net income, reflecting ongoing profitability challenges. Efforts to reduce the loss are evident, but profitability remains a concern.
Balance Sheet
70
Positive
Snap's balance sheet displays a strong cash position with a significant amount of cash and equivalents. The debt-to-equity ratio has improved due to a decrease in total debt, indicating better leverage management. However, the equity ratio remains relatively low, with stockholders' equity comprising only about 30.46% of total assets, pointing to reliance on liabilities.
Cash Flow
68
Positive
Operating cash flow has improved, indicating better cash generation from operations. The free cash flow has grown significantly, showcasing improved efficiency in cash management. However, the company still faces challenges with achieving positive net income, affecting the overall cash flow to net income ratios.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue5.64B5.36B4.61B4.60B4.12B2.51B
Gross Profit3.03B2.89B2.49B2.79B2.37B1.32B
EBITDA-297.84M-492.60M-1.10B-1.18B-337.55M-742.21M
Net Income-546.30M-697.86M-1.32B-1.43B-487.95M-944.84M
Balance Sheet
Total Assets7.40B7.94B7.97B8.03B7.54B5.02B
Cash, Cash Equivalents and Short-Term Investments2.89B3.38B3.54B3.94B3.69B2.54B
Total Debt4.19B4.24B4.34B4.18B2.63B2.00B
Total Liabilities5.33B5.49B5.55B5.45B3.75B2.69B
Stockholders Equity2.07B2.45B2.41B2.58B3.79B2.33B
Cash Flow
Free Cash Flow392.38M218.65M34.79M55.31M223.00M-225.48M
Operating Cash Flow586.61M413.48M246.52M184.61M292.88M-167.64M
Investing Cash Flow-153.41M-717.08M570.95M-1.06B90.23M-729.86M
Financing Cash Flow-569.29M-428.62M-458.79M306.71M1.07B922.79M

Snap Technical Analysis

Technical Analysis Sentiment
Negative
Last Price6.99
Price Trends
50DMA
8.56
Negative
100DMA
8.43
Negative
200DMA
9.60
Negative
Market Momentum
MACD
-0.53
Positive
RSI
31.99
Neutral
STOCH
4.67
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SNAP, the sentiment is Negative. The current price of 6.99 is below the 20-day moving average (MA) of 7.65, below the 50-day MA of 8.56, and below the 200-day MA of 9.60, indicating a bearish trend. The MACD of -0.53 indicates Positive momentum. The RSI at 31.99 is Neutral, neither overbought nor oversold. The STOCH value of 4.67 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SNAP.

Snap Risk Analysis

Snap disclosed 65 risk factors in its most recent earnings report. Snap reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

Snap Peers Comparison

Overall Rating
UnderperformOutperform
Sector (60)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
79
Outperform
$36.62B27.8414.07%0.70%10.66%84.89%
79
Outperform
$24.52B12.9348.08%17.00%901.05%
73
Outperform
$41.07B185.2210.11%69.97%
68
Neutral
$8.98B18.37-865.98%1.03%-0.60%-11.05%
60
Neutral
$43.56B4.52-12.81%4.07%1.87%-43.08%
59
Neutral
$11.86B-26.42%13.18%54.39%
$5.02B-8.28%
* Communication Services Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
SNAP
Snap
6.99
-2.23
-24.19%
TME
Tencent Music Entertainment Group
25.82
15.48
149.71%
PINS
Pinterest
36.70
5.50
17.63%
MTCH
Match Group
37.44
0.90
2.46%
DJT
Truth Social
17.92
-1.92
-9.68%
RDDT
Reddit Inc Class A
225.54
166.79
283.90%

Snap Corporate Events

Private Placements and FinancingBusiness Operations and Strategy
Snap Issues Senior Notes for Debt Management
Neutral
Aug 12, 2025

Snap announced the issuance of senior unsecured notes under an indenture agreement dated August 12, 2025, with U.S. Bank Trust Company as trustee. The notes, which bear a 6.875% interest rate, will mature on March 15, 2034, unless repurchased or redeemed earlier. The net proceeds of approximately $541.3 million, along with cash on hand, were used for repurchasing outstanding convertible senior notes due in 2026, 2027, and 2028, totaling an aggregate cash repurchase price of $550.1 million. These transactions, settled around August 12, 2025, reflect Snap’s strategic financial maneuvers to manage its debt obligations.

Shareholder Meetings
Snap Co-Founders Ensure Proposal Approval Before Meeting
Neutral
Jul 10, 2025

Snap Inc. announced its 2025 annual meeting of stockholders will be held online on August 1, 2025. The meeting will address the election of eleven directors and the ratification of Ernst & Young LLP as the independent registered public accounting firm for the fiscal year ending December 31, 2025. Co-founders Evan Spiegel and Robert Murphy, who hold significant voting power, intend to approve these proposals by written consent, ensuring their passage before the meeting. This move highlights the control and influence the co-founders have over the company’s governance decisions.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Aug 19, 2025