![]() Snap CFO Derek Andersen warned that between Apple's privacy changes, supply chain interruptions and labor shortages, the company expects its fourth-quarter revenue to come in between $1.16 billion and $1.20 billion. Spiegel also warned that global supply chain interruptions and labor shortages reduces the "short-term appetite to generate additional customer demand through advertising." Shares of social media rivals Facebook and Twitter were each down nearly 7% in after-hours trading following the release of Snap's third quarter earnings, showing investors may fear similar impact on their financial results. "While we anticipated some degree of business disruption, the new Apple-provided measurement solution did not scale as we had expected, making it more difficult for our advertising partners to measure and manage their ad campaigns for iOS," Spiegel said in his prepared remarks. Snap CEO Evan Spiegel praised Apple's consumer-friendly changes on CNBC in February, when he also warned they posed a risk to Q4 earnings, but said on Thursday the iPhone's privacy settings impacted Snap's advertising business more than anticipated. Personal Loans for 670 Credit Score or Lower Personal Loans for 580 Credit Score or Lower Best Debt Consolidation Loans for Bad Credit Mark Hake writes about personal finance on and and runs the Total Yield Value Guide which you can review here. The opinions expressed in this article are those of the writer, subject to the Publishing Guidelines. Hake did not hold any position (either directly or indirectly) in the securities mentioned in this article. Value investors will look for SNAP stock to rise at least 24% more to $50.25 over the next year. It seems that the market is now catching on, especially with these stellar earnings now in the open. ![]() Other analysts’ price targets are in the mid-$50 range. 10’s price.īoth of these surveys show that analysts are even more bullish on SNAP stock than I am, as my target price is only $50.25. In the same vein, reports that there are 28 analysts and their average price target is $54.08. ![]() They see the huge free cash flow gains the company has made and are raising their target prices.įor example, the average price target for 39 analysts surveyed by Seeking Alpha is $56.11 per share or 38% over Feb. What to Do With SNAP StockĪnalysts are now getting more positive on SNAP. For example, if the company makes a higher FCF margin than 20% or if the market decides to value it at 1.0% FCF yield, rather than 2%, it could be worth much more. 10., or $50.25 per share.Īnd this is just a minimum expectation. This implies that SNAP stock is worth 23.7% more than its price of $40.62 on Feb. So if we use a 2% FCF yield metric to value Snap stock, its target value should be $80.5 billion. That could lead to a much higher stock price.įor example, if we assume that by 2023 the company makes a 20% margin on $8.05 billion in sales, the free cash flow will reach $1.61 billion. So, in the space of the next two years, Snap will almost double its sales (+95.4%), if analysts’ projections come to pass. Next year, the company is forecast to have sales of over $8 billion ($8.05b), up another 42.5%. Analysts forecast that revenue this year could rise 37.1% to $5.65 billion. 10, SNAP had a market capitalization of $65.1 billion. This can be seen on page 9 of its slide deck presentation along with other higher metrics. Moreover, and probably more importantly, its ARPU (average revenue per user) rose 18% YoY from $3.44 to $4.06. For example, its daily active users (DAU) count rose to 319 million, a 20% gain YoY. This was a result of an uptick in its broad social media metrics. ![]() As a result, its FCF margin rose to 12.4% in Q4 (i.e., $161m/$1,297m in revenue). In other words, the company seems to have fixed its issues with the complications from the iOS operating system. So most of the FCF during the year was in Q4. By the end of 2021, it produced $223 million in FCF. It was $161 million in Q4 2021, compared to $(69) million in the prior year. This includes a revenue gain of 42% to $1.3 billion in Q4, 2021.īut more importantly, Snap is now producing large amounts of free cash flow (FCF). Snap reported that its revenue, all of it from digital ad sales, increased 64% year-over-year (YoY) to $4.1 billion in 2021.
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