Snap (SNAP) AI Stock Analysis

• Market Cap: $13.50B
• Dividend Yield: N/A
• Average Volume (3M): 76.49M
• Price to Earnings (P/E): ―
• Beta (1Y): 1.20
• Revenue Growth: 13.18%
• EPS Growth: 54.39%
• Country: US
• Employees: 5,061
• Sector: Communication Services
• Sector Strength: 97
• Industry: Internet Content & Information
• EPS (TTM): -0.16
• Shares Outstanding: 1,435,682,400
• 10 Day Avg. Volume: 102,761,673
• 30 Day Avg. Volume: 76,493,631
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.17
• Enterprise Value/Revenue: 2.81
• Enterprise Value/Gross Profit: 5.22
• Enterprise Value/Ebitda: -53.23
• 1Y Price Target: $9.27
• Price Target Upside: 16.02% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 27

• Rating: 59 Neutral
• Price Target: $7.50 ▼(-6.13% Downside)

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

Revenue Growth

Snap's consistent revenue growth, driven by small and medium customers, indicates a strong market position and potential for sustained expansion.

Augmented Reality Engagement

High engagement with AR lenses showcases Snap's innovation in AR technology, strengthening its competitive edge and user retention.

Cash Flow Improvement

Improved cash flow management enhances Snap's financial stability, providing resources for strategic investments and debt management.

Negative Factors

Profitability Challenges

Ongoing net losses reflect persistent profitability challenges, which could hinder long-term financial health and investor confidence.

Ad Platform Issues

Ad platform issues impacting revenue growth highlight operational risks that could affect future advertising revenue and market competitiveness.

Debt Management

Issuing senior notes to manage debt obligations indicates reliance on debt financing, which could limit financial flexibility and increase interest expenses.

Snap Business Overview & Revenue Model

Company Description

Snap Inc. is a technology and social media company known for its multimedia messaging app, Snapchat. Founded in 2011, Snap operates primarily in the social media and augmented reality sectors. Its core products include the Snapchat app, which allows users to send photos and videos that disappear after being viewed, as well as various augmented reality features and lenses that enhance user engagement. Additionally, Snap develops and sells hardware products, such as Spectacles, which integrate camera technology into wearable sunglasses.

How the Company Makes Money

Snap 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 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

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

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

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.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	5.64B	5.36B	4.61B	4.60B	4.12B	2.51B
Gross Profit	3.03B	2.89B	2.49B	2.79B	2.37B	1.32B
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 Assets	7.40B	7.94B	7.97B	8.03B	7.54B	5.02B
Cash, Cash Equivalents and Short-Term Investments	2.89B	3.38B	3.54B	3.94B	3.69B	2.54B
Total Debt	4.19B	4.24B	4.34B	4.18B	2.63B	2.00B
Total Liabilities	5.33B	5.49B	5.55B	5.45B	3.75B	2.69B
Stockholders Equity	2.07B	2.45B	2.41B	2.58B	3.79B	2.33B
Cash Flow
Free Cash Flow	392.38M	218.65M	34.79M	55.31M	223.00M	-225.48M
Operating Cash Flow	586.61M	413.48M	246.52M	184.61M	292.88M	-167.64M
Investing Cash Flow	-153.41M	-717.08M	570.95M	-1.06B	90.23M	-729.86M
Financing Cash Flow	-569.29M	-428.62M	-458.79M	306.71M	1.07B	922.79M

Snap Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 7.99
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SNAP, the sentiment is Neutral. The current price of 7.99 is above the 20-day moving average (MA) of 7.25, below the 50-day MA of 8.20, and below the 200-day MA of 9.32, indicating a neutral trend. The MACD of -0.09 indicates Negative momentum. The RSI at 60.09 is Neutral, neither overbought nor oversold. The STOCH value of 81.59 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for SNAP.

Snap Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
META	87 Outperform	1.95T	28.21	36.66%	0.26%	19.38%	40.62%
GOOGL	79 Outperform	3.02T	26.75	31.85%	0.33%	13.19%	34.51%
PINS	78 Outperform	24.81B	13.04	40.02%	―	17.00%	901.05%
SPOT	77 Outperform	143.36B	166.84	12.14%	―	15.52%	67.15%
RDDT	73 Outperform	49.87B	224.93	9.06%	―	69.97%	0.00%
SNAP	59 Neutral	$13.50B	―	-26.42%	―	13.18%	54.39%
Sector *	60 Neutral	$48.67B	4.58	-11.27%	4.14%	2.83%	-41.78%

Snap Corporate Events

Snap Issues Senior Notes for Debt Management

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.

Snap Co-Founders Ensure Proposal Approval Before Meeting

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.